Follow our conference call and webcast that starts at 10 AM CET which will be available on this website.  

If you have questions or would like further information, please contact:  

Ahold Delhaize Investor Relations at investor.relations@aholddelhaize.com or +31 (0)88 659 5213. 

Webcast

Follow our conference call and webcast that starts at 10 AM CET which will be available on this website.  

If you have questions or would like further information, please contact:  

Ahold Delhaize Investor Relations at investor.relations@aholddelhaize.com or +31 (0)88 659 5213. 

Webcast

Follow our conference call and webcast that starts at 10 AM CET which will be available on this website.  

If you have questions or would like further information, please contact:  

Ahold Delhaize Investor Relations at investor.relations@aholddelhaize.com or +31 (0)88 659 5213. 

Webcast

Delivering value through price investments and price favorite products every day

As customers continue to feel the pressure on their household budgets, together with our brands, we remain focused on prioritizing price investments as well as increasing the amount of price favorite products to meet the ask for high quality and affordability. For example, Stop & Shop’s new “Good Things Are in Store” campaign highlights its commitment to value and trust. With local price investments expanded to 88 more stores in Massachusetts and improved in-store service, customers are saving more.

Across Europe, we have added 167 new products for joint sourcing, including 100 products in the price favorite range. In fact, our European brands now offer at least 900 price favorite products across their assortments. Across the pond, the U.S. has introduced 300 new own-brand products. In both regions, own-brand sales continue to outpace the rest of the store, driving loyalty and delivering value while ensuring high quality and affordability. 

Expanding online growth through seamless shopping experiences, innovation and AI

From unified digital platforms to smart assistants and cutting-edge tech hubs, we're enhancing convenience, personalization, and operational efficiency across our markets. In the U.S., Hannaford launched PRISM, marking the completion of Ahold Delhaize USA’S (ADUSA) unification of all five U.S. brands under one digital platform. Customers now benefit from expanded payment options like EBT and Apple Pay, plus smarter substitutions enhancing convenience, personalization, and control across all U.S. banners. 

We see many opportunities to accelerate AI across every domain of our business. Our brands are building foundational AI platforms that will enable future scaling of winning AI solutions. For example, at Albert Heijn, the AI-powered assistant Steijn, now helps millions of customers answer the daily question “What’s for dinner?” by suggesting personalized recipes and step-by-step guidance.

Additionally, our teams are scaling the proprietary retail media platform, Edge, to our U.S. brands in the coming year. As retail media grows in impact, this move supports more relevant customer experiences and new revenue opportunities. Edge enables on-site display, sponsored search, and in-store digital screens, and has already delivered strong results across several European brands. 

Strengthening market presence and preparing for growth

In the U.S., Food Lion also launched omnichannel remodels at 153 stores in Charlotte, North Carolina, enhancing convenience with updated assortments, self-checkouts, and integrated e-commerce options through Food Lion To Go. Now, construction is underway on 92 additional stores in Greensboro, scheduled to open in 2026. To meet growing capacity demands and support future growth, ADUSA announced plans to build a new, tech-enabled distribution center in North Carolina.

In Europe, we are expanding our reach and improving store experiences. Albert Heijn opened 14 new stores this year, including four in Belgium, and had remodeled or relocated over 40 stores. Delhaize Belgium is also preparing to open eight new supermarkets in early 2026 under its affiliate model and expects to complete the transaction of Delfood early next year, further strengthening its position in the Belgian convenience market.

Continuing to advance health, sustainability, and community impact

We remain committed to building healthy communities and a healthier planet. This quarter, Delhaize Belgium introduced a range of hybrid protein products combining the familiar taste of meat with the benefits of plant-based ingredients, following Albert Heijn earlier this year. Delhaize is also reformulating its canned vegetables to remove added salt, a concrete step toward improving nutritional value of own-brand products. In the U.S., ADUSA joined forces with Danone North America and The Nature Conservancy to reduce methane emissions from yogurt production over the next five years which is part of our broader effort to decarbonize operations and promote regenerative agriculture.

This quarter we also saw the launch of the Healthy Future Academy, a new learning platform that helps associates integrate health and sustainability into their daily work, from farm to plate.

For more information on our Q3 2025 financial results, check out the video below and this webpage:

Follow our conference call and webcast that starts at 10 AM CET which will be available on this website.  

If you have questions or would like further information, please contact:  

Ahold Delhaize Investor Relations at investor.relations@aholddelhaize.com or +31 (0)88 659 5213. 

Webcast

We’re also proud to share that we have already reached e-commerce profitability for 2025, on a fully allocated basis. This demonstrates the strength and scalability of our omnichannel model. With the guidance of our Growing Together strategy – which we launched just over a year ago – see how our great local brands worked hard to be your trusted local food retailer this quarter.  

From double digit online grocery growth to a new AI assistant for colleagues  

We’re excited to see that customers are increasingly embracing the convenience of our brands’ omnichannel offerings (an integrated approach that combines both digital and in-store shopping experiences). For the fifth consecutive quarter, online grocery sales have surged with double-digit growth, proving that our digital and physical shopping experiences are working in harmony to meet customers’ evolving needs. More specifically, our online achievements have been driven by several factors including same-day models like click and collect and partnerships with DoorDash and Instacart, automating operations and leveraging retail media.

In Belgium for example, Delhaize has doubled its e-commerce capacity with a new €53 million distribution center. This expansion boosts weekly order capacity from 25,000 to 50,000, offering a faster, more accessible service. While Delhaize continues to enjoy strong in-store traffic, this investment strengthens its dynamic omnichannel strategy and refines its online approach.

In the U.S., Food Lion completed the rollout of our proprietary PRISM platform. PRISM enables faster, more tailored online shopping, helping customers easily find favorite products, activate digital coupons, re-order quickly, and choose delivery or pick-up with ease. In the second half of the year, PRISM is expected to launch at Hannaford, extending these benefits to even more customers.

Innovation is also accelerating in AI. At Albert Heijn, customers now have a smart kitchen companion: Steijn, the new friendly face of My AH Assistant. Steijn is already helping with everyday cooking questions and will soon offer even more practical support, in English and additional languages. Albert Heijn has also introduced an AI assistant (based on Gen AI) to help make the work of its more than 80,000 colleagues easier. It gives them instant access to key information so they can assist customers faster and more effectively.

Meanwhile, Maxi in Serbia launched MaxiGPT, an AI digital assistant that equips store associates with quick answers to essential daily tasks, making their work smoother and more efficient. At Albert in the Czech Republic, AI is being used at checkout counters to help store associates identify unpackaged items, improving accuracy and speeding up the check-out process. 

Capturing customer loyalty with price investments and innovative own-brand assortments

Ahold Delhaize has committed $1 billion in price investments in the U.S. over the next four years while also leveraging the strength of our own-brand portfolio. For example, in May, Hannaford rolled out price cuts on approximately 2,500 center store, own-brand items in Massachusetts, supported by a targeted omnichannel marketing campaign and leveraged the Hannaford My Rewards loyalty program. The investment is already showing promising results, with center store, own-brand sales modestly outpacing the rest of the store.

Own-brand assortments, exclusive to our brands’ stores, are a key differentiator, helping drive customer loyalty and providing great quality at unbeatable prices. When looking at our own-brand assortments, so far this year we have introduced 300 new own-brand products in the U.S., and in Europe, we have added 167 new products for joint sourcing, including 100 products in price favorite range. 

Additionally, in the Netherlands, Albert Heijn introduced 15 new products that combine animal- and plant-based ingredients. These products offer a familiar taste and texture, with improved nutritional values (such as lower saturated fat) and a lower carbon footprint. They are also priced the same or cheaper compared to their fully animal-based equivalents. In addition, Albert Heijn developed more than 100 products with circular ingredients. Together, this represents an annual reduction of 5 million kilograms of food waste within its supply chain.

For more information on our Q2 2025 financial results, check out the video below and this webpage:

Follow our conference call and webcast that starts at 10 AM CET which will be available on this website.  

If you have questions or would like further information, please contact:  

Ahold Delhaize Investor Relations at investor.relations@aholddelhaize.com or +31 (0)88 659 5213. 

Webcast

This quarter brought its share of challenges related to ongoing geopolitical and macroeconomic volatility. In these times, our brands stay fiercely committed to serving our customers and communities, focusing on targeted efforts in pricing, own-brand expansion, and more. Whether responding to the evolving needs of customers, supporting communities in times of hardship, or driving innovation in food retail, we’re proud of the impact our teams continue to make every day.

Leveraging scale to make local impact

This quarter marked an important milestone in our growth journey with the completion of the acquisition of Profi Rom Food SRL. This move doubled our retail footprint in Romania, enabling us to deliver even more value, variety, and convenience to customers. It also demonstrates our commitment to use our collective strengths to grow in markets where we already operate, while deepening our connection to local communities.

Our commitment to people and communities was further recognized in January, when the Top Employers Institute (TEI) certified Ahold Delhaize Group and all our U.S. brands, alongside several of our European brands as Top Employers. This reflects our dedication to creating a purpose-driven, supportive environment where associates are empowered to thrive. In February, we were proud to be named among the top 1% of employers globally, receiving the prestigious Leading Employers award, which underscores the progress we've made on our Thriving People strategic priority as part of our broader Growing Together strategy.

Improving customer experiences & innovation

At Ahold Delhaize, delivering vibrant and accessible shopping experiences, both in-store and online, remains a top priority. This quarter, Ahold Delhaize USA (ADUSA) partnered with Inmar Intelligence to enhance the customer journey through more efficient and targeted digital offers. In the first quarter of this year, ADUSA brands delivered over 3.2 billion in personalized offers to its customers, which is an increase of 25%.

We also continued to advance our technology agenda. In March, Ahold Delhaize hosted its second annual MLOps (Machine Learning Operations) Conference at our headquarters in Zaandam, the Netherlands. Bringing together over 130 tech professionals, the event was a hub for knowledge sharing and collaboration, reinforcing our focus on operational excellence and innovation through cutting-edge technology.

Supporting healthy communities & planet

Ahold Delhaize is committed to supporting the transition to a healthy, sustainable food system. For us, this means providing affordable, healthy food while partnering to drive decarbonization, protect nature and reduce waste. In March, we successfully priced a €500 million 8-year Sustainability-Linked Bond, which was oversubscribed due to great interest. This milestone in aligning our funding strategy with our sustainability agenda fits within our Healthy Communities and Planet strategic priority.

We are pleased that our strategy is receiving external recognition, for example through the validation of our climate targets by the Science Based Targets initiative. Furthermore, Ahold Delhaize received an A– climate rating from CDP.

Our ambition to empower healthier choices continues to grow. In January, our European food retail brands announced a consolidated target, aiming for 50% plant-based food sales by 2030. This goal promotes a gradual shift toward affordable, nutritious, and diverse plant-rich diets, directly supporting our health and climate ambitions by reducing carbon emissions, while providing greater value and choice for customers that cater to different lifestyles.

In the U.S., Food Lion reached its ambitious goal to donate 1.5 billion meals to neighbors facing food insecurity, months ahead of schedule. Food Lion Feeds also announced that it would double its impacts and reach 3 billion plates by 2032.

In Europe, our Belgium brand Delhaize has been recognized for its leadership in health and sustainability by the latest Business Impact Assessments by Sciensano. Specifically, it achieved top scores for various sustainability efforts such as its corporate sustainability strategy, packaging initiatives, and waste management policies. For example, Delhaize is tackling food waste by partnering with start-up Wastech, exploring ways to convert food waste into animal feed using insect larvae.

Across the Benelux region, bol improved its packaging processes, reducing cardboard usage by 27%, glue by 60%, and achieving a 28% reduction in CO₂ emissions per package.

Our teams across our local brands will continue to work hard in serving the communities they operate in.

Learn more about our Q1 financial results in the video below: 

Follow our conference call and webcast that starts at 10 AM CET which will be available on this website.  

If you have questions or would like further information, please contact:  

Ahold Delhaize Investor Relations at investor.relations@aholddelhaize.com or +31 (0)88 659 5213. 

Webcast

Providing healthy and affordable food options

Across all markets, our local brands remained dedicated to supporting household budgets. One of the ways our brands aim to offer high-quality, healthy and affordable options, is through their own-brand assortments. In 2024, our Central and Southeastern Europe (CSE) brands brought 500 additional products to the own-brand product range, differentiating on both price and assortment. And across all our European markets, customers can now find roughly 7,700 of Price Favorites, our own-brand products at entry-level prices. 

In the U.S., brands like Giant Food and Stop & Shop lowered prices on hundreds of own-brand products. We are focusing strongly on raising customers’ awareness of own-brand quality and price across our U.S. stores. During Q4, U.S. own-brand sales grew faster than national brands across the store, both in dollars and units. Through continuing to expand these own-brand product ranges across our local brands, we aim to achieve a 45% own-brand share for Ahold Delhaize by 2028.

Creating vibrant shopping experiences

We want customers to have vibrant shopping experiences, both in-store and online. In December, our local brand Stop & Shop announced a brand-wide rollout of its innovative Savings Station, an in-store kiosk designed to make digital coupons and personalized offers more accessible for all customers, regardless of their access to smartphones or internet.

We elevate our online shopping experiences by using deeper personalization and integrated digital solutions through AI and predictive analytics. This year, Ahold Delhaize’s USA brands delivered over 12 billion personalized offers– a 1 billion increase relative to 2023. To further improve digital coupons and savings, Ahold Delhaize USA announced a new partnership with Inmar Intelligence. In Europe, Ahold Delhaize announced the launch of Alfa Beta’s new customer app – the final in a series of six launches across the European market. This unified, modular app is designed to deliver a seamless and cohesive online shopping experience.
 

Supporting healthy communities and planet 

We continue to implement projects to promote healthy, affordable food, and to drive sustainable business practices like reducing food waste and energy consumption across our brands.

In 2024, our European brands have launched open-source climate hubs. The hubs serve as online platforms where suppliers can gain insights into tracking and reducing carbon emissions. Later in the year, we signed a Virtual Power Purchase Agreement (VPPA) with the Spanish renewable energy company BRUC to support the financing and construction of a cluster of five solar power plants in Seville, Spain. This corresponds to approximately 30% of Ahold Delhaize’s total electricity usage in its European operations. 

In the U.S., ADUSA has initiated several partnerships with suppliers across the value chain to work on combined projects to reduce carbon emissions in their production processes. 
 

Supporting our local neighborhoods

Our brands’ local stores are at the heart of the communities they serve. These stores and their associates play a significant role, catering to the local circumstances and the needs of their neighborhood customers. 
We actively partner with local food banks and non-profit organizations to make a meaningful impact. In 2024, our brands collectively donated a total of 75,000 tons of food. Last July, Ahold Delhaize entered into a partnership with the Global Foodbanking Network, which helps us to further support community-led food banks.

Throughout the year, there were incredible community initiatives undertaken by our local brands, including both financial and food donations as well as volunteering projects and events. Examples include school meal programs, support for the elderly, veterans as well as volunteering efforts like fundraising, social gatherings to promote togetherness, and educational programs that promote healthy lifestyles to schoolchildren. 

Our brands’ and their local communities were also confronted with several environmental disasters in 2024, including Hurricanes Helene and Debby in the U.S., extreme floods in the Czech Republic, and wildfires in Greece. We’re proud of the efforts our local brands and their associates made amid these difficult times, volunteering their time to help to those who need it most.

Looking forward

We proudly announced that Romanian retailer Profi joined our family of great local brands. The addition of Profi marks a new chapter for Ahold Delhaize in Central and Southeastern Europe. Profi’s extensive footprint, deep local ties, and innovative approach align with Ahold Delhaize's vision of creating even stronger connections with customers and communities.  

 For 2025, with our Growing Together strategy and our growth model as a guide, we will invest at a steady pace to enrich our omnichannel capabilities, drive growth in customer loyalty and expand our reach. We will prioritize and add to the scope of price investments, accelerate new store openings and remodels, and scale technologies that have a proven and successful track record. 

Learn more about our full year results in the video below:

Follow our conference call and webcast that starts at 10 AM CET which will be available on this website.  

If you have questions or would like further information, please contact:  

Ahold Delhaize Investor Relations at investor.relations@aholddelhaize.com or +31 (0)88 659 5213. 

Webcast

Before we get into our third quarter highlights, we’d like to acknowledge the devastating impact of environmental disasters many of our teams and customers experienced throughout the quarter. From Hurricane Helene and Debby in the U.S., extreme floods in the Czech Republic and wildfires in Greece. Our local brands and their associates played a significant role in supporting their communities and we’re proud of their efforts. Food Lion, with support from its foundation and its customers, donated more than $3.8 million and over 1.1 million pounds of food and supplies; Albert in the Czech Republic sent six truckloads of humanitarian aid to be distributed through food banks and directly to crisis centers in the affected area; and Alfa Beta in Greece supported local authorities, fire brigades and volunteer fire fighters impacted by the wildfires of Northern Attica with product donations. Moments like these serve as a reminder of the vital role our stores play in the heart of their communities.

Throughout the third quarter, our great local brands and colleagues worked hard to be your trusted local food retailer guided by our Growing Together strategy. Learn more below.

Accelerating online sales

In the third quarter, we again saw online growth rates accelerate as we are attracting more customers to our online platforms. We are becoming more efficient and more profitable, for example throughout Q3, we saw a positive impact of our transition to native apps as conversion rates increased by almost 10% r. Additionally, U.S. customers are responding positively to our partnership with DoorDash; where we have seen a 40% increase in the number of orders in Q3 compared with Q2.  Also in the U.S., we have increased our click & collect store locations by over 70 new locations over the past 12 months. 

Our brands’ loyalty programs also continued to strengthen. In the Netherlands, Albert Heijn’s loyalty program now has over 1.2 million paying premium customers and today marks the 15^th anniversary since the launch of the AH app. 

In the Netherlands, Albert Heijn experienced its sixth consecutive quarter of online sales growth. To keep up with growing demand, it has enhanced its logistics network and expanded capacity at their Home Shop Centers. Its second mechanized Home Shop Center in Zwolle is exceeding expectations, allowing the brand to serve more customers in the northeast. Now, 20% of Albert Heijn orders in the Netherlands are processed in an automated way.

Improving customer shopping experience

Our brands on both sides of the Atlantic are investing in new stores with fresh and modern shopping experiences. Not only does this allow us to introduce expanded assortments, we can also leverage technology to operate more efficiently and more sustainably. 

This quarter, Delhaize Belgium completed its store transitions under its Future Plan with the last store converting this week. Affiliates and associates have worked hard over the past 18 months and thanks to the entrepreneurial mindset of our affiliates combined with the expertise of associates, stores that have been converted for a year or more have experienced double-digit sales growth compared to pre-conversion. Many of the converted stores are already reaching the performance levels initially forecasted for their second, third or even fourth year. Market share has also recovered to over 22%, surpassing pre-announcement levels.

In the U.S. Food Lion completed its 167-store remodeling program in the Raleigh-Durham market, and remodel construction of their 152 stores in the Charlotte market will be set for completion in 2025. In Europe, year to date, we have invested in 261 new stores and remodels. Our modernized stores offer an expanded ecosystem of integrated products and services that align with customers’ evolving preferences, as well as featuring upgraded facilities with new cooling and heating installations.

Ahold Delhaize USA also now offers enhanced in-store audio solutions to further empower consumer packaged goods partners to engage customers with personalized, real-time messaging to create a multi-sensory in-store experience.  

As announced in July, Stop & Shop just completed the closure of 32 stores and has begun to roll out our revitalization strategy including price investments as mentioned in May at our strategy day. We're committed to enhancing the customer experience through price investments, store remodels, and improved in-store service. Starting with 25 stores in Rhode Island, Stop & Shop has lowered prices on 3,500 items across national and private brand products and introduced in-store saving kiosks for easier digital coupon redemption and loyalty rewards.

Healthy communities & planet

As part of Ahold Delhaize’s purpose to inspire everyone to eat and live better, for a healthier future for people and planet, one of our key priorities is to reduce greenhouse gas emissions through sustainable supply chains. To this end, Ahold Delhaize USA has entered into various partnerships with suppliers to support regenerative agriculture, most recently with General Mills. This cooperation aims to decrease greenhouse gas emissions in our value chain (scope 3 emissions).  

Throughout the third quarter, our brands also continued to enhance their food donation and food waste reduction programs and also promoted healthy initiatives. In the Netherlands, Albert Heijn already has the largest organic assortment of regular supermarkets in the Netherlands, and the recent introduction of organic fresh packages will make shopping for these items even easier and more convenient. Additionally, Albert Heijn has further developed their dynamic markdown technology to also include non-perishable products. This is a great example of how our investments in technology and innovation can contribute to our health and sustainability ambitions by reducing food waste. Lastly, bol our Dutch e-commerce brand, joined forces with second-hand stores in the Netherlands and Belgium to give returned items a second life. 

Leading into the holiday period, our teams will be working hard to fill our brands shelves and apps with exciting offerings to provide you with everything you need for the holiday season. Stay tuned for more updates!

Learn more about our Q3 financial results in the video below:  

Follow our conference call and webcast that starts at 10 AM CET which will be available on this website.  

If you have questions or would like further information, please contact:  

Ahold Delhaize Investor Relations at investor.relations@aholddelhaize.com or +31 (0)88 659 5213. 

Webcast

This quarter, see how our great local brands and colleagues worked hard to be your trusted local food retailer guided by our growth model and Growing Together strategy – and more specifically, zooming in on three of our key strategic priorities.  

Vibrant customer experiences

Across Ahold Delhaize and our brands, we serve our customers’ life needs through our core and expanding ecosystem of integrated products, services, channels and data. This was evident in Q2 through both in-store and online activities. Ahold Delhaize’s EU brands increased their assortment of Price Favorite products – or everyday low-price items – by 15% compared to last year. In the U.S., Stop & Shop and Giant Food’s new ‘Compare and Save’ campaign highlights the value of own-brand products while making it easier to earn loyalty rewards at the same time. The campaign is already showing encouraging first responses with higher sales in both dollars and units.  

With positive results in online sales this quarter, brands in both Europe and the U.S. are leveraging customer preferences in various ways: Alfa Beta’s new partnership with efood, the largest delivery service in Greece allows customers to access their favorite products within 60 minutes. Food Lion now offers To Go pickup or home delivery in more than 95% of its 10-state operating area, allowing easier and convenient shopping. ADUSA brands are also further optimizing their store-first fulfillment model with click and collect, as well as delivery partnerships with Instacart and DoorDash. Deliveries with DoorDash have already more than doubled compared to our first quarter. And in the Netherlands, bol announced it will be Lowlands’ Festival shop (think: Coachella but then in the Netherlands) in the coming years. The store will be open 24 hours a day allowing festivalgoers to pre-order all their camping and festival supplies at the on-site store.  

Healthy communities and planet

As Ahold Delhaize works towards the transition to a more healthy and sustainable food system, we demonstrated this through several examples this quarter. In May we announced our new partnership with The Global FoodBanking Network, an international non-profit organization dedicated to supporting community-led foodbanks which contributes to hunger relief while reducing food loss and waste. Last month we also published our 2024 Human Rights Report which includes updates to our Standards of Engagement for suppliers and highlights our brands’ initiatives to improve workers’ conditions across the value chain. 

Across our brands, Food Lion celebrated 10 years of Food Lion Feeds, their hunger relief platform that has donated 1.2 billion meals since 2014 and is well on track to its pledge to donate 1.5 billion by the end of 2025. The GIANT Company also announced the return of its Healing the Planet grant program in partnership with Keep Pennsylvania Beautiful. This year, $100,000 in grants will be awarded for native tree planting projects. In Europe, Albert Heijn joined the Shelf-Life Coalition and Upcycled4Food initiative to raise awareness for the prevention of food loss and waste.  

Portfolio and operational excellence

Across Ahold Delhaize and our brands, we use technology and data, we save for our customers every day and we leverage scale to become the most operationally efficient in our industry. In Q2 Albert Heijn demonstrated its commitment to further growing its e-commerce ambitions by mechanizing its fulfillment activities with the opening of a second fully automated Home Shop Center in Zwolle, the Netherlands. Additionally, our CSE brands – Albert, Alfa Beta, Maxi and Mega Image – opened 23 stores throughout the quarter. 

In the U.S., Stop & Shop recently announced the closure of 32 stores, set for completion this November as part of our revitalization plan. While this was a difficult decision for associates, customers, and local communities, it is important for creating a sustainable store base long term. By investing in Stop & Shop’s core markets, we can enhance the customer experience and achieve successes. For example, in June, Stop & Shop opened a new flagship store in Allston, Boston, featuring an expansive prepared foods section with chef-prepared grab-and-go meals, an expansive produce department with more fresh and local fruits and vegetables, and a large range of products to serve the diverse range of cultures and communities of Allston.  

Looking ahead, our Growing Together strategy will ensure we stay at the forefront of innovation in healthy foods, omnichannel experiences and supply chain transformation, serving customer needs through a well invested and future focused foundation. 

Learn more about our Q2 financial results in the video below:  

Follow our conference call and webcast that starts at 10 AM CET which will be available on this website.  

If you have questions or would like further information, please contact:  

Ahold Delhaize Investor Relations at investor.relations@aholddelhaize.com or +31 (0)88 659 5213. 

Driving value and savings through loyalty programs

This quarter, several of our brands leveraged their loyalty programs to allow great savings and value for customers. For example, Giant Food lowered the prices of hundreds of its own-brand items and expanded its Flexible Rewards loyalty program to include double points on Giant brand items purchased. Additionally, 1.2 million customers from The GIANT Company took advantage of their ‘Weekly Pro Pick’, a newly launched program that features items customers need the most at the best value. The value delivered with our brands’ loyalty programs were supported by the many recognitions they received. Like Food Lion, Giant Food, Stop & Shop being listed in Newsweek’s 2024 American’s Best Loyalty Programs. The GIANT Company was also recognized as a leader in the grocery industry by the 2024 Dunnhumby Retailer Preference Index for its visible discounts and sale items, as well as its advertising of low prices and being competitive in its promotions and rewards.  

In Europe, our Czech brand Albert celebrated the third anniversary of their ‘My Albert’ app which now offers a 15% discount on Nature’s Promise healthy products and organic food to its active users. This makes Albert our third European brand that rewards customers for choosing healthy products, following the Delhaize SuperPlus program and the Albert Heijn Premium program. Additionally, Albert Heijn reached a milestone of reaching more than 1 million subscribers to its Premium subscription which allows customers a 10% discount on all organic and AH Terra products, Albert Heijn’s fully plant-based own-brand product line.  

Steps in health and sustainability

This quarter, we were proud to announce that Ahold Delhaize priced a €1.6 billion multi-tranche transaction, including a Sustainability-Linked bond and Green bond. The proceeds will be applied to finance or refinance new or existing Eligible Green Projects to help us reach our sustainability targets.  

In Europe, all our brands launched their climate hubs to support suppliers in their carbon emission reduction. Additionally, Albert Heijn made strides in prioritizing healthier options as they revealed that in 2023 they reduced 115 million sugar cubes, 62,000 kilograms of salt and 275,000 kilograms of saturated fat from their own-brand products compared to 2022.  

In the U.S., Ahold Delhaize USA and our brands were recognized for their commitment in supporting the White House Challenge to End Hunger and Build Healthy Communities, announcing an investment of nearly $1 million in nutrition programming for children in 2024. 

Scaling tech capabilities and innovation

This quarter five of our European brands: Alfa Beta, Albert, Delhaize Belgium, Maxi and Mega Image spearheaded the delivery of an app convergence project that resulted in a unified, scalable, modular app framework designed to streamline and enhance the shopping experience for customers. Additionally, Ahold Delhaize USA launched its partnership with DoorDash to make an additional on-demand grocery delivery marketplace available to customers. 

In April, Ahold Delhaize announced its collaboration with four other leading grocery retailers to establish W23 Global, a collaborative venture capital fund. The fund will seek to invest in innovative start-ups and scale-ups that deploy technology to enhance customer experiences, transform the grocery value chain and address the sector’s sustainability challenges. We also launched AD/01, a new tech studio in Bucharest, Romania where top tech talent will work on innovative solutions that help provide leading customer experience solutions across our European brands.  

Lastly, our Dutch e-commerce retailer celebrated its 25th silver jubilee this quarter. 25 years ago, bol's very first product was sold digitally. Today, bol now has more than 13.5 million customers, a range of 38 million items and around 50,000 sales partners.  

Throughout 2024, we will remain focused on our brands’ customers and the developments we will announce at our Strategy Day on May 23. Stay tuned on our social media channels to learn more!  

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.

Summary of key financial data

1. Comparable sales excluding gasoline, net consumer online sales, underlying operating income and related margin, diluted underlying EPS, free cash flow and the percentage changes at constant rates are alternative performance measures that are used throughout this report. For a description of alternative performance measures, and a reconciliation between percentage changes and percentage changes at constant rates, see Note 13 (refer to Interim Report for notes) to the interim financial statements. 
2. Comparative amounts have been restated to conform to the current year's presentation (see Note 2; refer to Interim Report for notes).

Comments from Frans Muller, President and CEO of Ahold Delhaize

Q1 Financial highlights

Group highlights

U.S. highlights

Europe highlights

Outlook

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Ahold Delhaize CEO Frans Muller comments, “I am proud of our continued support of local communities in 2023. Our role as a company goes beyond the prices on the shelf. It is also our responsibility to serve communities, help with broader societal challenges and foster a nurturing environment for associates to thrive. I’d also like to commend customers for their donations to our brands’ store collection initiatives. Although these aren’t included in our donations total, it is clear our customers make a huge impact with their kindness and generosity.”   
 

From 182 million meals to 200 in-school pantries: how do our brands make a difference?  

From volunteerism to donations in cash, products and food – see some of the examples of how our brands went above and beyond in serving their communities.  
 

Delhaize Belgium donated approximately 2,577 tonnes of food close to expiration to their local network of around 150 charity partners and food banks. This contribution occurred both in Delhaize supermarkets and distribution centers. Behind the scenes, many volunteers within this charity network ensured a reduction in waste and provided the equivalent of about 4.8 million meals to beneficiaries. 
 

Food Lion's impactful Food Lion Feeds program resonated deeply, with 182 million meals donated in 2023 alone. Food Lion associates also volunteered over 32,000 hours, equivalent to 10 million meals, demonstrating their dedication to their communities. Their omnichannel remodels not only revitalized stores but also gave back to the community, with a mobile teaching kitchen and pantry supporting low-income diabetes patients in North Carolina. 
 

Albert and its Bertik Helps campaign, supported children in need across the Czech Republic by donating almost €160,000 to 100 NGOs across the country focused on projects supporting children in education, integration, preparation for independent living and more. Through Albert's Fairs, children from orphanages honed their skills, earning nearly €28,000 in sales. And with the National Food Collection, over 116 tonnes of food reached the tables of those in need.  
 

Giant Food raised over $5.1 million through generous support of their associates and customers with their roundup campaigns. Giant Food associates also volunteered over 1,800 hours in 2023 by participating in various community service events. These events included setting up a market for locals to shop for food at no cost, packing boxes of food for organizations, cleaning up a stream, planting trees, and packing holiday meal boxes and snack packs for families and children in need.
 

Bol, our leading Dutch e-commerce retailer distributed "Boekiebags" (book bags) to combat the summer reading dip among grade school children through its Bollebozen program. Golden wrappers in 4 of the “boekiebags” led lucky kids to special events with renowned Dutch artists, fostering a love for books and learning. Additionally, 110,000 books were handed out to children throughout 450 schools in the Netherlands and Belgium during the holiday period. Several other initiatives were also conducted throughout bol’s Bollebozen program in 2023.    

The GIANT Company donated almost $4 million to hunger relief programs and its “Make a Difference Challenge” demonstrated their spirit of community empowerment and support. Donating $500,000 to 20 local non-profits, they celebrated their 100th anniversary by investing in projects that promote healthier people and a healthier planet.
 

Alfa Beta's Love Food Program was a testament to their commitment to sustainability and community support. Donating over 13.8 million meals in collaboration with "Boroume" and the Greek Food Bank, they tackled food waste while nourishing over 123,000 people in need. It’s annual volunteer day also saw 5,000 associates volunteer their time on diverse activities such as collecting essential goods for people affected by floods, planting trees, and adopting 2,000 trees to be planted across Greece. 
 

Hannaford donated $1.3 million for its Eat Well, Be Well initiative that prioritizes the health and wellbeing of older adults. Hannaford also committed $210,000 in donations to provide both immediate aid and long-term support to the residents of Lewiston and Auburn following a tragic mass shooting. Additionally, Hannaford donated $350,000 to support The Ecology School's AgroEcology for Resilient Communities Project, which addresses climate change, food systems challenges, and food insecurity within the community. 
 

Delhaize Serbia's "Food for All" initiative set a new standard for food surplus management and direct donations. The program collects food items daily from 26 different locations, including fresh pastries, second-grade fruits and vegetables, and dry products with shorter shelf life or damaged original packaging. Distributing over 25 tonnes of surplus food to beneficiaries in just one month, they tackled hunger while reducing environmental impact. 
 

Stop & Shop continued the expansion of its School Food Pantry program, hitting a milestone of establishing over 200 in-school pantries across their footprint and raised over $1 million to help fight student hunger and expand the program through their first-ever register campaign.  Stop & Shop also awarded a grant of $75,000 to Montefiore Hospital in the Bronx, New York, to provide pediatric patients and their families with regular access to fruits and vegetables. Additionally, they gave $120,000 to the non-profit organization QARI to outfit a co-branded electric van, which delivers fresh produce to schools across New York City where there are high populations of immigrants in need. 
 

These examples of generosity from across our brands demonstrate the power of collective action and the impact of giving back.  
 

Learn more about our Q4/FY financial results in the video below:  

Zaandam, the Netherlands, February 14, 2024 – Ahold Delhaize, one of the world’s largest food retail groups and a leader in both supermarkets and e-commerce, reports fourth quarter results today.

Summary of key financial data

Comments from Frans Muller, President and CEO of Ahold Delhaize

Q4 Financial highlights

Group highlights

U.S. highlights

Europe highlights

Outlook

Register to watch webcast recording below

Follow our webcast that starts at 10 AM CET. The webcast and presentation will be available on this website.

If you have questions or would like further information, please contact:

Ahold Delhaize Investor Relations at investor.relations@aholddelhaize.com or +31 88 659 9209

Webcast

Zaandam, the Netherlands, November 8, 2023 – Ahold Delhaize, one of the world’s largest food retail groups and a leader in both supermarkets and e-commerce, reports third quarter results today.

Summary of key financial data

Comments from Frans Muller, President and CEO of Ahold Delhaize

“During these times of heightened human suffering around the world, I am proud of our associates for their hard work and unwavering commitment to supporting their local communities. Inflation, increasing interest rates and changes in U.S. government support remain tangible headwinds and are creating anxiety for many customers. Our great local brands have been agile in expanding their assortments with high-quality own-brand products at great prices and swift to pass on price reductions where possible. They continue to invest in and leverage the power of our digital capabilities to provide customers with meaningful, highly personalized discounts tailored to their needs and wallets.

"As a result, customers continue to place their trust in our brands, which is clearly reflected in positive market share growth. With our strong portfolio of international brands, we grew comparable store sales by 3.1% in the third quarter. At a Group level, we delivered an underlying operating margin of 3.8% and diluted underlying EPS of €0.58. While both these metrics are lower year-over-year, around two thirds of the EPS decline is linked to insurance-related adjustments and an unfavorable foreign exchange rate.

“In the U.S., excluding the impact of weather and calendar shifts, comparable sales grew by 1.0%. The reduction in emergency federal Supplemental Nutrition Assistance Program (SNAP) benefits, higher interest rates and the resumption of student loan repayments in October continue to weigh on customer sentiment. On its own, the reduction in SNAP benefits resulted in approximately a four percentage-point headwind to sales growth in the third quarter. While we were able to offset a large portion of this headwind through our strong value propositions and ongoing momentum in online sales, the dilutive impact of a changing sales mix and increasing shrink contributed to slightly lower-than-expected U.S. margins. With the help of measures we are putting in place through our Accelerate initiatives, in-store actions to reduce shrink and further volume support incentives from vendors, we expect this modest margin pressure to be transitory and pass in a couple of quarters.

“When looking at Europe, which has endured more pressure in the last two years than the U.S., I am confident we are on the path to recovery. While inflation is also moderating in Europe, our major efforts to elevate and harmonize our customer value proposition accelerated comparable sales growth to 7% in the quarter. Delhaize Belgium announced that 51 stores have now signed agreements with independent buyers and started transitioning the first stores to the new operators in October. Excluding the effects of this transformation, comparable sales in Europe were up 7.2% and underlying operating margin exceeded prior year levels. In the Netherlands, Albert Heijn and bol had outstanding market share gains. And we are delighted to have completed the conversion of the first 15 Jan Linders stores to Albert Heijn in Q3.

"At the start of 2023, we set a clear agenda for our company: ensuring the right balance between navigating the complexities of the immediate environment, while, at the same time, positioning the company for longterm success. Regarding the latter, we have made three important moves that highlight our strong, disciplined focus on value creation. The first is the announcement of the planned addition of local Romanian supermarket chain Profi to our family. This will strengthen our existing footprint in this market and underscores our confidence in the central Southern European region. And, importantly, it will be accretive to our business in the first year post closing. The implied fully synergized acquisition multiple is approximately 7x on a June 2023 LTM EBITDA basis (post IFRS 16). Second, in light of the current challenges customers face, a deeper collaboration across the value chain and with peers is imperative.

To that end, and in addition to our existing AMS and Coopernic buying alliances, Ahold Delhaize has recently joined the European retail alliance joint venture EURELEC, to help address persistent price differences between European markets. And third, we carried out an extensive review of our U.S. online operations as part of our Accelerate initiative. Our biggest strength as a grocery retailer is the true omnichannel – combination of online and in-store – experience. With this in mind, and the economics to deliver a sustainable long-term return on investment, we have decided to divest FreshDirect to Getir.

"Health and Sustainability remains a top priority for all of our brands. In both the U.S. and Europe, we saw a strong performance on further reducing food waste, mainly driven by increased food bank donations and a continuation of local initiatives. Albert Heijn and bol were recently featured in a mini-documentary powered by Kickstart AI, in which the Albert Heijn team explained how they are using artificial intelligence to reduce food waste through demand forecasting. This is a great proof point for how they use innovation and technology to combine reducing food waste with providing customers access to affordable and healthy products while, at the same time, reducing costs. Bol demonstrated how automatic packaging machines controlled by smart algorithms help them use less cardboard and create smaller parcels. The bol team also uses AI to determine if additional packaging is actually needed. Less packaging results in reduced transport movement and the ability to use smaller, more sustainable vehicles, such as Cycloon's bike couriers. Ahold Delhaize has an industry leading science-based net-zero climate plan for our own operations and our supply chain, in line with a 1.5 degree scenario. We will share some updates on this plan later this year.

“A lot has changed since we embarked on our Leading Together journey. I am proud of how we have adapted to the evolving market conditions and taken well-thought-through strategic decisions to steer our company towards its long-term potential. We have done all of this while, at the same time, delivering superior free cash flow, as can be seen in our increased guidance for 2023. With new players on our leadership team, we have the energy and determination to keep this trajectory going. Taking stock of what we have learned so far, we are currently refreshing our priorities to calibrate to the macro and competitive environment. This will require some shifts in focus. Therefore, I am pleased to announce that we will hold a Strategy Day in May 2024, at which time we will present some of the exciting things we have in store to build the next phase of growth and value creation for our company."

Q3 Financial highlights

Group highlights

Group net sales were €21.9 billion, an increase of 2.9% at constant exchange rates, and down 2.1% at actual exchange rates. Group net sales were driven by comparable sales growth excluding gasoline of 3.1%, partially offset by lower gasoline sales. The impact of the transformation in Belgium had a negative net impact on Q3 Group comparable sales of approximately 0.2 percentage points.

In Q3, Group net consumer online sales increased by 6.4% at constant exchange rates, mainly due to growth at bol (formerly referred to as bol.com). Group online sales in grocery increased 5.3% at constant exchange rates.

Group underlying operating margin was 3.8%, a decrease of 0.6 percentage points at constant exchange rates, mainly reflecting a decline in the U.S. margin due to higher operating costs and the cycling of a 0.2 percentage-point favorable insurance reserve release as well as a 0.1 percentage-point decline in favorable results from insurance.

In Q3, Group IFRS-reported operating income was €625 million, representing an IFRS-reported operating margin of 2.9%, mainly impacted by a €153 million impairment charge for FreshDirect and €61 million in restructuring and related costs pertaining to Belgium and other Accelerate initiatives.

Underlying income from continuing operations was €557 million, a decrease of 19.9% in the quarter at actual rates. Ahold Delhaize's IFRS-reported net income in the quarter was €394 million. Diluted EPS was €0.41 and diluted underlying EPS was €0.58, down 17.1% at actual currency rates compared to last year's results.

In the quarter, Ahold Delhaize purchased 7.1 million own shares for €213 million, bringing the total amount to €774 million in the first three quarters of the year.

 

U.S. highlights

U.S. net sales were €13.6 billion, an increase of 0.5% at constant exchange rates and down 7.1% at actual exchange rates. U.S. net sales were driven by comparable sales growth excluding gasoline of 0.9%, with strong growth in pharmacy, partially offset by lower gasoline sales. Excluding the impact of weather and calendar shifts, U.S. comparable sales growth was 1.0%, partially offset by the end of emergency SNAP benefits and the moderation of inflation rates. Hannaford and Food Lion continue to lead the U.S. brands' performance. Food Lion has now delivered consecutive positive sales growth for eleven years.

In Q3, online sales in the segment were up 4.4% in constant currency, driven primarily by double-digit growth at Food Lion and Hannaford as the brands continue to invest in their omnichannel proposition.

Underlying operating margin in the U.S. was 4.2%, down 0.8 percentage points at constant exchange rates from the prior year period due to the cycling of an insurance reserve release in 2022 that was favorable by 0.3 percentage points, higher operating costs, higher shrink and the unfavorable effect of a change in sales mix. In Q3, U.S. IFRS-reported operating margin was 2.9%, mainly impacted by an impairment charge in the amount of €153 million for FreshDirect.

 

Europe highlights

European net sales were €8.3 billion, an increase of 7.1% at constant exchange rates and 7.3% at actual exchange rates. Europe's comparable sales increased by 7.0%.

On March 7, 2023, Ahold Delhaize's Belgian brand, Delhaize, announced its intention to transform all of its integrated supermarkets in Belgium into independently operated Delhaize stores to strengthen its position in the country's competitive retail market. During Q3 2023, Delhaize Belgium announced that a buyer was found and asset purchase agreements signed for 32 stores, and on October 2, 2023, announced the same for 19 additional stores. It is Delhaize's intention to transform these 51 stores during the coming months. Excluding the impact of the transformation in Belgium, Europe's comparable sales increased by 7.2%.

In Q3, net consumer online sales increased by 7.6%. Online sales in grocery increased by 7.4%. At bol, Gross Merchandise Value (GMV) was €1.3 billion, an increase of 6.5% compared to the prior year. Bol's GMV sales from third-party sellers increased by 6.2% in Q3, and represented 62% of sales.

Underlying operating margin in Europe was 3.5%, consistent with the prior year. A decrease in the non-cash service charge for the Netherlands' employee pension plan offset the costs of the transformation in Belgium and higher energy costs. Europe's Q3 IFRS-reported operating margin was 2.9%, mainly impacted by €55 million for restructuring-related costs pertaining to Belgium and other Accelerate initiatives.

Outlook

This has been a year of continuous change as our brands adapt to the evolving market conditions and make strategic decisions to fuel long-term growth. With the changing dynamics, we are updating our guidance for the year as follows. We now expect free cash flow for 2023 in a range from €2.2 billion to €2.4 billion, reflecting the significant improvements made by our brands in working capital management. Net capital expenditures are now expected to be around €2.4 billion. Underlying EPS is now expected to be slightly below 2022 levels, as we see the reduction in federal government support having a slightly greater impact on our brands' operations than originally expected.

In addition, Ahold Delhaize remains committed to its dividend policy and share buyback program, as previously stated. We are on track to increase our full-year dividend within our 40-50% payout range, and we are completing our €1 billion share repurchase program in 2023, as planned. Ahold Delhaize also announces a €1 billion share buyback program to start at the beginning of 2024.³

1. Excludes M&A.
2. Calculated as a percentage of underlying income from continuing operations.
3. Management remains committed to our share buyback and dividend programs, but, given the uncertainty caused by the wider macro-economic consequences due to increased geopolitical unrest, will continue to monitor macro-economic developments. The program is also subject to changes resulting from corporate activities, such as material M&A activity.
    

Webcast

Ahold Delhaize CEO Frans Muller comments, “We take pride in the accomplishments we’ve achieved this quarter. During these times of heightened human suffering around the world, I am particularly proud of our associates for their hard work and unwavering commitment to supporting their local communities.” 
 

Learn more about our Q3 2023 business highlights within our key priorities below.  
 

Customer highlights

Across Europe and the U.S. our brands continue to drive value by implementing personalized offers through loyalty programs. Giant Food launched a pharmacy-based rewards program that allows customers to earn loyalty points from qualifying pharmacy purchases; and Maxi in Serbia joined the 'Better Prices’ initiative with the Serbian government to help reduce inflation. 
 

Ahold Delhaize also joined Eurelec, the European retail alliance, to address price differences between European markets. With this specific partnership we aim to promote open and fair price negotiations with the largest FMCG brands (fast-moving consumer goods) across Europe, which ultimately benefits our customers. 
 

Health & Sustainability highlights  

In the U.S., Food Lion, Hannaford, and The Giant Company were recognized for their efforts to reduce emissions from their refrigerant systems by the EPA's GreenChill program. Giant Food's collaboration with Divert resulted in processing 30.8 million pounds of wasted food in their first year, showcasing a commitment to reducing food waste. Hannaford introduced Snack Pals Plates, an initiative aimed at promoting healthy eating habits among children. These plates were designed with colorful quadrants representing fruits, vegetables, whole grains, and lean proteins to make mealtimes engaging and nutritious. Hannaford was also the first major supermarket to join a partnership supporting organic dairy farms, emphasizing their dedication to organic and sustainable practices. 
 

In Europe, Delhaize Belgium, in collaboration with Electra, began installing fast-charging points at their stores which is part of a plan to set up 1,200 charging points. Albert Heijn's utilization of artificial intelligence (AI) in demand forecasting to reduce food waste was also highlighted in a minidocumentary powered by Kickstart AI. It illustrated their innovative approach to sustainable practices and how they provide customers with affordable and healthy products while minimizing costs. Albert Heijn also launched AH Terra: a new own-brand line of around 200 plant-based products. This step contributes to Albert Heijn's goal of making 50% of sold proteins to be of vegetable origin by 2025 and 60% by 2030. The percentage is currently 44%.  


Across Ahold Delhaize and all our brands, we're continuously moving forward in reducing CO2 emissions. Soon, we will also give an update on our industry-leading roadmap towards our climate targets for our own operations and the supply chain, which are in line with the 1.5 degrees scenario.
 

Operational highlights  

At the end of October, Albert Heijn opened a mechanized Home Shop Center to serve customers in their online orders. The new center will make the work easier for associates as it handles 45,000 orders weekly. This summer bol also opened its second warehouse for extra-large items like trampolines and TVs.  

 
In our CSE region (Central and Southeastern Europe) Mega Image in Romania will go live with its first Home Shop Center in the coming weeks. This is a notable example of how our brands leverage and optimize learnings across the organization – in this instance, applying the successful Albert Heijn e-commerce model. 

 

Portfolio highlights  

Last week, we were pleased to share that Ahold Delhaize will acquire 100% of Romanian supermarket chain, Profi – subject to approval from regulatory authorities. This acquisition will provide a complementary customer proposition to our great local brand Mega Image in the Romanian market. 

 
AD Retail Media ranked 5th best overall US Retail Media Network and scored the #2 position in the area of omnichannel advertising sales. By continuously investing in retail media capabilities, AD Retail Media has ensured that advertisers can reach customers and can leverage the full scale of our Ahold Delhaize USA brands. It also helps our brands to learn more about their customers’ preferences to meet their needs. 
 

Similarly in Europe, through our collaboration with Adhese, the first major milestone was achieved with the expansion of the self-service platform to include display campaigns. With this step, advertisers can directly set up banner campaigns on the Albert Heijn website and app, monitor performance and optimize campaigns. New features and services will be added to the platform in the coming 1.5 years and it is intended to role this out to several other European brands in the course of 2024. 


Today, Ahold Delhaize USA also announced it has entered into an agreement to sell its FreshDirect business to Getir, a pioneer in ultrafast grocery delivery operating in key markets in the U.S. and globally. Following a thorough review, Ahold Delhaize USA made the decision to sell the FreshDirect business to focus investments in its omnichannel businesses.

 

Learn more about our Q3 financial results in the video below:  
 

Follow our webcast that starts at 10 AM CET. The webcast and presentation will be available on this website.

If you have questions or would like further information, please contact:

Ahold Delhaize Investor Relations at investor.relations@aholddelhaize.com or +31 88 659 9209.

Webcast

Zaandam, the Netherlands, August 9, 2023 – Ahold Delhaize, one of the world’s largest food retail groups and a leader in both supermarkets and e-commerce, reports second quarter results today.

Summary of key financial data

Comments from Frans Muller, President and CEO of Ahold Delhaize

"The agility and flexibility that our brands and associates are showing, adjusting quickly to meet customers’ needs while, at the same time, diligently staying the course on our various transformation projects, underpinned the company's strong performance this past quarter. All these efforts remain particularly important as the external environment continues to be dynamic. I am proud of the resilience our brands' associates continue to demonstrate in the face of climate impacts, such as the fires in Greece, and the widespread rise in social tensions, which are, unfortunately, leading to more incidents in stores.

"On a positive note, we see more evidence that inflation has passed its peak. For customers, our great local brands have swiftly reflected price decreases, where possible. For our brands' operations, inflation remains at more elevated levels, due to higher energy, commodity, transport and labor costs, all of which are having a particularly notable impact on our European margins. Nevertheless, at a Group level we were able to deliver a consistent performance from the top to the bottom line, with comparable store sales excluding gas up 4.6% and diluted underlying EPS increasing by 4.7% in Q2.

"In the U.S., Q2 comparable sales grew by 4.0%, excluding the impact of weather and calendar shifts. Powered by growth in loyalty sales and increasing online penetration, we were able to more than compensate for the negative headwinds related to a reduction in the SNAP federal assistance program and moderating inflation rates. Food Lion and Hannaford, in particular, continue to see strong market share gains as both brands further elevate their omnichannel capabilities. In aggregate, e-commerce penetration in the U.S. reached 8.1% for the first half of the year. We also continue to take concrete actions to orient our online fulfillment capabilities toward same-day delivery models. In line with this, we will close a facility in Jersey City, New Jersey, effective March 2024, utilizing our existing Stop & Shop store network and partners to service customers in this catchment area going forward.

“In Europe, excluding the impact of strikes in Belgium, comparable sales were up 7.6%. A key highlight of the quarter was a very strong performance in online retail. At bol.com, Gross Merchandise Value (GMV) grew by 10.5% to €1.4 billion. At Albert Heijn, we crossed the 800,000 mark for premium subscribers and continue to see improvements in e-commerce profitability. While underlying operating margin was down 0.2 percentage points at 3.2% in the quarter, excluding the impact of inflated energy costs and the effects on Delhaize Belgium from our operating model transformation, underlying operating margin exceeded prior year levels. When it comes to the initiative at Delhaize, I am confident the management team is on the right track and we expect the first fifteen stores will begin converting in October and November.

"We remain dedicated to making progress on our sustainability ambitions and are proud to share that we have achieved an AAA rating from MSCI. Being categorized into the highest-scoring range indicates that Ahold Delhaize is a leader in the industry in managing its most significant sustainability challenges and opportunities. Another major achievement was bol.com's attainment of B Corp Certification. With 13 million customers and 52,000 local sales partners, we are proud that an e-commerce platform of bol.com's size has achieved this recognition. The brand’s commitment to taking customers and sales partners along on its journey aligns perfectly with Ahold Delhaize’s goal to make healthy and sustainable choices easy for everyone.

"Our focus on striking the right balance between investing in growth and creating opportunities to drive operational excellence continues to fuel the positive outlook for our company. I am, therefore, pleased that we are in a position to increase our free cash flow guidance for 2023 to a range between €2.0 billion and €2.2 billion and reaffirm the rest of our guidance for the year. With our strong culture, known for its agility, ability to drive transformative change and commitment to sustainability, I am confident we are well prepared to navigate the complexities of the current business environment and position the company to drive brand strength and market share growth in the coming periods."

Q2 Financial highlights

Group highlights

Group net sales were €22.1 billion, an increase of 4.3% at constant exchange rates, and up 2.9% at actual exchange rates. Group net sales were driven by comparable sales growth excluding gasoline of 4.6%, partially offset by lower gasoline sales. Strikes at Delhaize Belgium, and, to a lesser extent, weather and calendar shifts, had a negative net impact on Q2 Group comparable sales of approximately 0.7 percentage points.

In Q2, Group net consumer online sales increased by 9.3% at constant exchange rates, due to robust growth at bol.com, which has now fully lapped COVID-19-related comparisons. Group online sales in grocery increased 6.2% at constant exchange rates.

In Q2, Group underlying operating margin was 4.1%, consistent with Q2 2022 at constant exchange rates. Favorable insurance results offset margin declines in the U.S. and Europe. Excluding the impacts of inflated energy costs and strikes at Delhaize Belgium, underlying operating margin exceeded the prior year's results.

In Q2, Group IFRS-reported operating income was €724 million, representing an IFRS-reported operating margin of 3.3%, mainly impacted by charges related to the transformation in Belgium and other Accelerate initiatives, including impairment charges for store assets in Belgium (€108 million) and for the Jersey City fulfillment center (€40 million). Additionally, there were €40 million in restructuring and related costs pertaining to these initiatives.

Underlying income from continuing operations was €601 million, an increase of 1.3% in the quarter at actual rates. Ahold Delhaize's IFRS-reported net income in the quarter was €468 million. Diluted EPS was €0.48 and diluted underlying EPS was €0.62, up 4.7% at actual currency rates compared to last year's results.

In the quarter, Ahold Delhaize purchased 11.7 million own shares for €355 million, bringing the total amount to €561 million in the first half of the year. The 2023 interim dividend is €0.49, up 7% versus the prior year, and in line with the Group's interim dividend policy.

 

U.S. highlights

U.S. net sales were €13.6 billion, an increase of 2.7% at constant exchange rates and up 0.3% at actual exchange rates. U.S. net sales were driven by comparable sales growth excluding gasoline of 3.6%, partially offset by lower gasoline sales. Excluding the impact of weather and calendar shifts, U.S. comparable sales growth was 4.0%, partially offset by the end of emergency SNAP governmental benefits and the moderation of inflation rates. Food Lion and Hannaford continue to lead brand performance. Food Lion delivered its 43rd consecutive quarter of positive sales growth.

In Q2, online sales in the segment were up 6.6% in constant currency, driven primarily by double-digit growth at Food Lion, which opened over 100 additional click-and-collect locations compared to the prior year.

Underlying operating margin in the U.S. was 4.6%, down 0.1 percentage points at constant exchange rates from the prior year period. In Q2, U.S. IFRS-reported operating margin was 4.2%, mainly impacted by an impairment charge in the amount of €40 million for the Jersey City fulfillment center related to the Accelerate initiative.

 

Europe highlights

European net sales were €8.4 billion, an increase of 7.0% at constant exchange rates and 7.4% at actual exchange rates. Europe's comparable sales increased by 6.3%.

On March 7, Ahold Delhaize's Belgian brand, Delhaize, announced its intention to transform all of its integrated supermarkets in Belgium into independently operated Delhaize stores to strengthen its position in the country's competitive retail market. Ahold Delhaize supports the intention to transform to one aligned operating model, which will allow the brand to better serve customers in the long term. By having all stores operated by local entrepreneurs in the future, Delhaize will have a better opportunity to respond to local conditions. Following the announcement, Delhaize Belgium has been impacted by strikes. Excluding the impact of strikes in Belgium, Europe's comparable sales increased by 7.6%.

In Q2, net consumer online sales increased by 10.8%. Online sales in grocery increased by 5.3%. At bol.com, gross merchandise value ("GMV") was €1.4 billion, an increase of 10.5% compared to the prior year. Bol.com's GMV sales from its nearly 52,000 third-party sellers increased by 13.3% in Q2, and represented 66% of sales.

Underlying operating margin in Europe was 3.2% in Q2, down 0.2 percentage points from the prior year mainly due to the impact of escalating energy costs and strikes at Delhaize Belgium. Excluding these impacts, underlying operating margin in Europe exceeded the prior year. Additionally, the non-cash service charge for the Netherlands employee pension plan decreased €15 million as a result of higher discount rates in the Netherlands. Europe's Q2 IFRS-reported operating margin was 1.6%, mainly impacted by costs incurred in Belgium related to the affiliation of stores, including an impairment charge in the amount of €108 million for store assets and €26 million for restructuring related costs.

Outlook 

Despite a dynamic external environment, Ahold Delhaize is increasing its free cash flow guidance for 2023. We now expect free cash flow in a range from €2.0 billion to €2.2 billion. This change reflects our ongoing solid and consistent operating cash flows, inflows related to the collection of a tax receivable in Belgium and outflows related to the delivery of various projects identified as part of our Accelerate operational efficiency initiative. This initiative was launched in Q4 2022 to evaluate additional savings and efficiency levers to streamline organizational structures and processes, optimize go-to-market propositions, increase joint sourcing and consolidate IT – with a clear priority to unlock resources to accelerate our Save for Our Customers program, support our ambitions to achieve e-commerce profitability, and focus investments on high-return projects.

Ahold Delhaize reiterates the rest of the Group's 2023 outlook, which we announced when we published our Q4 2022 results. Underlying operating margin is expected to be ≥4.0%, in line with the Company's historical profile. Underlying EPS is expected to remain at around 2022 levels at current exchange rates. Net capital expenditures are expected to total around €2.5 billion, with increased investments in digital and online capabilities as well as healthy and sustainable initiatives focused on reducing our climate impact. In addition, Ahold Delhaize remains committed to its dividend policy and share buyback program in 2023, as previously stated.

1. Excludes M&A.
2. Calculated as a percentage of underlying income from continuing operations.
   Management remains committed to our share buyback and dividend programs, but, given the uncertainty caused by the wider macro-economic consequences of the war in Ukraine, will continue to monitor macro-economic developments. The program is also subject to changes resulting from corporate activities, such as material M&A activity.
    

Webcast

CEO Frans Muller comments, “Support for communities remains central in our approach, as our great local brands expand the Price Favorites assortment in Europe and work behind the scenes to harmonize our own brand assortment in the United States. Teams are working hard to deliver affordable healthy food options to customers and create value through loyalty and personalization programs and bulk item promotions.” 
 

Throughout our second quarter, we continued to focus on our key priorities within our Leading Together strategy to move forward. 
 

Customer priority  

Ahold Delhaize is continuously improving its omnichannel customer experience to allow our great local brands' customers to shop whenever and wherever they want. For example, Peapod Digital Labs (PDL) migrated Stop & Shop and Food Lion from a web-based app to a fully native app that provides a more intuitive and seamless customer experience. PDL already rolled out its native mobile apps to The GIANT Company and Giant Food in our first quarter of 2023, and Hannaford will come next in 2024.  
 

Additionally, in our second quarter Stop & Shop remodeled 12 of its stores, including three in New York City, that focus on enhancing multicultural assortments, while Hannaford launched Flybuy to improve the Hannaford To Go customer experience. Giant Food also reported that over 500,000 own-brand redemptions were made with its Flexible Rewards’ value program on eggs, milk and other staples. And in Europe, our brands now have 6,500 own-brand Price Favorite items and aim to reach 10,500 in the short term.  
 

Operational priority 

By driving efficiency and innovation throughout our brands’ supply chain and fulfilment, we are scaling knowledge and technology. In our second quarter for 2023, Maxi opened its first home shop center, the first warehouse for online food distribution in Serbia, while Albert in Czech, expanded its online services coverage to two additional cities and now offers same day delivery.  
 

In the U.S., ADUSA Distribution added the Chester, New York distribution center to their self-distribution network which will serve Stop & Shop and Hannaford stores with an anticipated volume of 65 million cases of product each year. Food Lion also completed an additional 47 omnichannel store remodels in August. Back in Europe, Albert Heijn launched Gen AI Labs, its own AI start-up to improve customer experience and its associates’ work. 
 

Health & Sustainability priority

No matter how challenging our business can be, a key investment and progress area for Ahold Delhaize is our health and sustainability strategy. This quarter we’re proud to share that Ahold Delhaize's AA MSCI ESG rating was upgraded to AAA – indicating Ahold Delhaize is a leader in the industry in managing the most significant sustainability challenges and opportunities. Another significant sustainability achievement was bol.com’s B Corp Certification and Albert Heijn's announcement that it is on its way to earning B Corp certification.   
 

In the U.S. The GIANT Company awarded $300,000 in support of local projects that address food waste prevention, reduction and recovery and Stop & Shop introduced a single-use plastic bag elimination strategy and implemented a fee for paper bags to encourage the switch to reusable bags. 
 

Learn more about our Q2 financial results in the video below:  
 

Follow our conference call and webcast that starts at 10 AM CET which will be available on this website. 

If you have questions or would like further information, please contact: 

Ahold Delhaize Investor Relations at investor.relations@aholddelhaize.com or +31 (0)88 659 5213. 
 

Webcast

Webcast

As we faced another challenging quarter with high inflation and social uncertainty, our Leading Together strategy continued to guide us in the right direction. With our four key priorities which support our strategy – customers, operations, portfolio and health & sustainability – Ahold Delhaize and our great local brands are moving forward. See our brands’ key business highlights for Q1 below.  
 

Customer priority

Our brands’ customers are at the heart of everything we do. This is why we continuously invest in integrated solutions to allow customers to shop whenever and wherever they want with our omnichannel touchpoints. We leverage our scale and tech knowledge across regions to provide the best loyalty programs, useful apps, and online delivery.  
 

In the U.S., three of our great brands, Food Lion, Giant Food and Stop & Shop were named amongst Newsweek’s Americas Best Loyalty Programs 2023 list. The list ranks grocery retailers by six criteria including recommendation to others, overall satisfaction, benefits/rewards, trust, customer support and ease and enjoyment.  
 

Peapod Digital labs also migrated The GIANT Company and Giant Food from a web-based app to a fully native app providing a more intuitive, seamless customer experience. It will soon be released for Stop & Shop in Q2. 
 

As a result of successful cross-functional and cross-brand collaboration between Ahold Delhaize and our Central and Southeastern European (CSE) brands, we have launched a cross-sell feature within, our CSE brands to improve personalized offerings and drive order value. 
 

Another highlight for Q1 was Food Lion’s progress in converting its first stores to its new omnichannel model. In addition to being more energy efficient, the stores are much better equipped for click-and-collect or home delivery. The first 24 stores will be completed in May.   

 

Operational priority

By driving efficiency and productivity through technology, not only do our operations run smoothly, we are also a leader in the industry. For example, our Dutch brand Albert Heijn sold 70% of food nearing its expiration – with the goal of increasing this significantly – via dynamic mark-down pricing using machine learning. After a store associate inputs a product reaching its expiration into the system, the algorithm designed by Albert Heijn's talented data scientists determines the most optimal discount and automatically updates the electronic shelf label. The algorithm recalculates the price regularly until the product is sold. Albert Heijn is the only supermarket in the world with this internally developed software that is used to the level of scale. 

Furthermore, we were also able to host our first machine learning operations (MLOps) conference. More than 100 data scientists, devops engineers and tech professionals from across all industries joined the event to connect and learn from inspiring tech leaders about challenges and solutions in MLOps. Collaborative function is key to the creation and quality of AI solutions. For example, optimizing on-shelf availability and reducing food waste.  
 

Portfolio priority 

Continuously strengthening our global portfolio is something we're always aiming towards. In our first quarter, Alfa Beta in Greece reached a milestone of opening its 150th Shop & Go store, and by the end of this year, there will be 200 stores in this format.   
 

While in Europe, our Dutch e-commerce brand bol.com, has redefined its strategy to focus on its three business models: e-commerce, advertising and logistic services. They are each supported by strategic enablers on cost effectiveness, organizational effectiveness and accelerating tech impact.  
 

Health & Sustainability priority  

A major driver of our Leading Together strategy is prioritizing our health and sustainability ambitions, and our first quarter proved to demonstrate more great initiatives from our brands. The GIANT Company in the U.S. added new electric vehicles to its delivery fleet, Hannaford introduced Planet Hannaford to empower and inspire customers to make better eco-friendly choices, and Food Lion received Energy Star Partner of the Year for a 22nd consecutive year. 

Excitingly, bol.com is helping its sales partners to become more sustainable by offering a network of advice and support parties. Mega Image reached 81% of green energy usage compared to 71% in Q1 2022. Albert Heijn opened up its renowned Better for Nature & Farming program to other market parties. And at Ahold Delhaize, we priced a €500 million Green Bond, the first one in our history, that reinforces assets with a positive environmental impact such as green buildings and clean transportation.  

 

Learn more about our Q1 financial results in the video below:  
 

Zaandam, the Netherlands, February 15, 2023 – Ahold Delhaize, one of the world’s largest food retail groups and a leader in both supermarkets and e-commerce, reports fourth quarter results today.

The summary report for the fourth quarter 2022 can be viewed and downloaded at www.aholddelhaize.com.

Summary of key financial data

Comments from Frans Muller, President and CEO of Ahold Delhaize

“I am pleased to report a solid end to the year for Ahold Delhaize. Our strong international portfolio of local brands has continued to provide distinct competitive and societal advantages, particularly from our scale and solid financial position. In this challenging year, we have seen double-digit inflation levels not witnessed in 40 years, an energy crisis created by war and the ongoing effects of the global pandemic on people's lives. Our role during this time has been clear: keeping shelf prices as low as possible to support our customers and make healthy food options accessible to all.

“During 2022, our family of great local brands also contributed €218 million of charitable cash, products and food donations to local and regional food banks and non-profit organizations. The Food Lion Feeds program achieved an important milestone with its one billionth meal donated, and is well on the way to reaching its goal of 1.5 billion meals donated by 2025. Delhaize Belgium donated emergency generators to the Ukrainian Red Cross, ensuring 95,000 Ukrainians continue to have access to clean water and heating. Hannaford launched its "Eat Well, Be Well – A Path to Better Health" initiative, which will provide $1.5 million in funding to non-profit organizations for hosting programs that increase access to healthy, fresh food tailored to the specific needs of an individual's health conditions, and provide nutrition education.

"In Q4, we again rallied our organization around our core strengths – operational excellence, tight cost control and disciplined capital allocation. This was critical to provide fuel for reinvesting in our customer value proposition to offset the impact of inflation wherever possible. To that end, we significantly exceeded our original Save for Our Customers goals in 2022, generating €979 million in cost savings, which is over €100 million more than we had originally planned. I am proud of our associates across Ahold Delhaize and our local brands who left no stone unturned. As many of the sames challenges persist and may even intensify in 2023, this formula will continue to play an important role as we look for further opportunities to improve our brands' operations.

"As our brands adapted their assortments and omnichannel customer journeys to rising consumer price sensitivity, the positive impact from our focus on providing great value without compromising on quality was clearly reflected in our Q4 sales figures. Comparable store sales ex gas grew 7.9% in Q4. Net consumer online sales increased by 5.0%, and our online grocery sales were up 14.4%. Leveraging these strong sales, we delivered an underlying operating margin of 4.4% and diluted underlying EPS growth of 22.6% in Q4. Our earnings were positively influenced by a strong operating performance in the U.S., as well as foreign exchange and interest rate changes, which offset higher margin pressures in Europe.

"In the U.S., comparable sales accelerated at all the brands versus Q3, resulting in a growth rate of 9.3%.This was driven by strong holiday season activations. For example, the U.S. brands' sales from loyalty programs and online orders reached all-time highs. This has been a trend we have seen building throughout the year, as our consistent investment in growing these capabilities continues to pay off. Our brands' customer relationship management campaigns are a good example, now reaching around 30 million households and delivering over 10 billion personalized offers annually. We are also increasingly encouraged by the progress we see at Stop & Shop, where the brand's remodeled New York City stores are delivering double-digit sales growth and exceeding expectations. We plan to remodel a further eight stores in NYC in Q1 2023, and roll out key learnings to 40 other stores in the fleet throughout the year.

"In Europe, comparable store sales were up 5.7% in Q4. Excluding bol.com, which continued to trade against the backdrop of a challenging e-commerce market in the Benelux, comparable store sales increased 6.9%. In the Central and Southeastern Europe (CSE) region, we have now harmonized over 700 own brand products, and continue to benefit from increased collaboration, harmonization of processes and best-practice sharing. In the Netherlands, Albert Heijn introduced dynamic digital discounting in all its stores, enabling customers to purchase products nearing the end of their shelf life with discounts ranging from 25% to 70%. In addition, Albert Heijn entered into a partnership with Jan Linders Supermarkets, with the vast majority of stores to be converted into Albert Heijn franchisees on receiving the requisite approvals. The agreement allows Albert Heijn to expand its regional coverage in the south of the Netherlands. Underlying operating margins in Europe decreased to 4.0% in Q4, as sharp increases in energy costs, in particular, impacted our profitability by 0.5 percentage points. While I am particularly proud of the mitigating actions and cost savings delivered by the region in Q4 and throughout the year, striking the right balance between savings and investments in 2023 will be even more important.

"At bol.com, for the full year, Gross Merchandise Value (GMV) excluding VAT was €5.5 billion, down 1.9%, against a market which declined around 6%. As you will remember, during the year, we made some significant adjustments to bol.com’s medium term plans to adapt to the current environment. As a result, despite higher investments in the business, cost increases and sales deleverage, bol.com remained profitable and delivered €125 million in underlying EBITDA.

“At Ahold Delhaize, we believe that it is important that we continue to make investments in our Healthy and Sustainable strategy. In our own operations, in 2022 we achieved reductions in CO₂ emissions of 32% compared to our 2018 baseline (30% in 2021) and tonnes of food waste per food sales of 33% against our 2016 baseline (20% in 2021). Our brands also continued to increase the percentage of own brand healthy food sales to 54.4% in 2022, up one percentage point compared to 2021. In November, we announced updated interim CO₂ emissions-reduction targets for the entire value chain (scope 3) to at least 37% by 2030.

"We also reconfirmed our commitment to become net zero in our own operations by 2040 and across the entire value chain by 2050. The updated targets were the result of extensive review and are in line with the UN's goal of keeping global warming below 1.5°C. For Ahold Delhaize, the main drivers of emissions reduction in scope 3 fall under three categories: suppliers and farmers; low-carbon products; and customer engagement. Encouraging and supporting our suppliers to set their own emissions-reduction targets in line with the latest scientific evidence, and signing up to the Science Based Targets initiative is a key element of our decarbonization efforts. Ahold Delhaize aims to play a leading role in this. We are proactively engaging with our supplier base and are leveraging our position in the world of food retail to create a positive movement towards the reduction of greenhouse gas emissions.

"Despite increasing macro-economic and geopolitical challenges, we expect to deliver consistent results in 2023, with a strong focus on cash-flow generation. I am particularly excited about our plans around monetization, mechanization and our digital ecosystem, which I am convinced will drive long-term competitive advantage and benefits for our customers. In the short term, with inflation remaining high, we will also continue to lean in and explore new opportunities to lower our costs. To that end, we are introducing a new Group-wide initiative called "Accelerate".

"This initiative builds on our existing Leading Together efforts to create more agile organizations, to capture more scale and empower our people to take action to drive efficiency. In particular, we will continue to evaluate additional savings and efficiency levers to streamline organizational structures and processes, optimize go-to-market propositions, increase joint sourcing and consolidate IT -  with a clear priority to unlock resources to accelerate our Save for Our Customers program and focus investments on high return projects. I am confident this proactive approach will make our organization stronger and ensure we can continue to deliver on our track record of driving consistent long-term value creation for all stakeholders.

Q4 Financial highlights

Group highlights

Group net sales were €23.4 billion, an increase of 8.1% at constant exchange rates, and up 15.9% at actual exchange rates. Group net sales were driven by comparable sales growth excluding gasoline of 7.9%, and, to a lesser extent, by foreign currency translation benefits and higher gasoline sales. Q4 Group comparable sales benefited by approximately 0.4 percentage points from the net impact of calendar shifts and weather.

In Q4, Group net consumer online sales increased by 5.0% at constant exchange rates, led by robust performance in the U.S., which increased 17.3% compared to the prior year. Net consumer online sales decreased 0.6% in Europe as the prior year benefited from a COVID-19 lockdown in the Netherlands. Online sales in grocery increased 14.4% at constant exchange rates.

In Q4, Group underlying operating margin was 4.4%, an increase of 0.2 percentage points at constant exchange rates, as strong cost savings were partially offset by higher labor, distribution and energy costs. In Q4, Group IFRS-reported operating income was €1,167 million, representing an IFRS-reported operating margin of 5.0%, mainly impacted by the gains on sale of investment properties in the U.S. in the amount of €158 million.

Underlying income from continuing operations was €707 million, an increase of 18.2% in the quarter at actual rates. Ahold Delhaize's IFRS-reported net income in the quarter was €809 million. Diluted EPS was €0.82 and diluted underlying EPS was €0.72, up 22.6% at actual currency rates compared to last year's results and up 14.2% at constant currency rates. In the quarter, 10.5 million own shares were purchased for €286 million, bringing the total year-to-date amount to €1 billion.

2022 diluted underlying EPS of €2.55 increased 16.5% at actual rates compared to 2021, exceeding the Company's original guidance of low- to mid-single-digit decline versus 2021. The higher-than-expected earnings were driven by strong comparable sales growth excluding gasoline as well as favorable foreign currency and interest rates. This drove strong cash generation with free cash flow of €2,188 million, up €570 million compared to the prior year. The difference is primarily related to decisions in 2021 to pay a $190 million (~€170 million) pension liability in the U.S. following 2020 U.S. MEP withdrawals, ahead of schedule, and fund the Company's decision to pay approximately €380 million related to a disputed tax claim in Belgium.

U.S. highlights

U.S. net sales were €14.8 billion, an increase of 9.2% at constant exchange rates and up 22.2% at actual exchange rates. U.S. comparable sales excluding gasoline increased by 9.3%, benefiting by approximately 0.5 percentage points from the net impact of weather and calendar shifts. Food Lion and Hannaford led brand performance with double-digit comparable sales growth at both brands during the quarter.

In Q4, online sales in the segment were up 17.3% in constant currency. This builds on top of 30.5% constant currency growth in the same quarter last year.

Underlying operating margin in the U.S. was 4.7%, up 0.4 percentage points at constant exchange rates from the prior year period. In Q4, U.S. IFRS-reported operating margin was 5.8%, mainly impacted by the gains on sale of investment properties in the amount of €158 million.

Europe highlights

European net sales were €8.6 billion, an increase of 6.2% at constant exchange rates and 6.6% at actual exchange rates. Europe's comparable sales excluding gasoline increased by 5.7%. Q4 Europe comparable sales were positively impacted by approximately 0.1 percentage points from calendar shifts.

In Q4, net consumer online sales in the segment decreased by 0.6%, following 7.4% growth in the same period last year. Grocery online sales increased by 8.0%. Despite challenging non-food e-commerce market conditions in the Benelux and the cycling of lockdown restrictions, bol.com was able to limit net consumer online sales decline to 2.9% after growing 7.8% in the same quarter last year. Bol.com's net consumer online sales from its more than 51,000 third-party sellers declined 1.6% in Q4 and represented 57% of sales.

Underlying operating margin in Europe was 4.0% in Q4, down 0.2 percentage points from the prior year due to escalating energy and volume deleveraging offset by disciplined cost-management measures. Europe's Q4 IFRS-reported operating margin was 3.8%.

Outlook 2023

The macro environment has become increasingly difficult for consumers, who contended with inflation levels during 2022 not seen in four decades. Inflation levels are expected to remain elevated particularly through the first half of 2023. Our brands are working hard to reduce costs and create additional efficiencies in order to keep prices as low as possible for our customers. In this context, the Company's brands continue to offer consumers a strong shopping proposition and are well-positioned to maintain profitability in the current inflationary environment. Ahold Delhaize's Group underlying operating margin is expected to be ≥4.0%, in line with the Company's historical profile. Margins will be supported by Save for Our Customers programs of ≥€1 billion in savings in 2023. This should help to offset cost pressures related to inflation and supply chain issues, along with the negative impact to margins from increased online sales penetration.

Underlying EPS is expected to be around 2022 levels at current exchange rates. Our earnings guidance implies further growth and a strong underlying operating performance, which will offset the non-recurrence of one-off gains in 2022 related to interest rates.

Free cash flow is expected to be approximately €2.0 billion. Net capital expenditures are expected to total around €2.5 billion, with increased investments in our digital and online capabilities as well as our healthy and sustainable initiatives. In addition, Ahold Delhaize remains committed to its dividend policy and share buyback program in 2023, as previously stated. We are proposing a full-year dividend for 2022 of €1.05 per share, and have previously announced a €1 billion share purchase program for 2023.

A detailed Outlook will be provided in the Annual Report 2022, which will be published on March 1, 2023.

1. Excludes M&A.
2. Calculated as a percentage of underlying income from continuing operations.
3. Management remains committed to our share buyback and dividend programs, but, given the uncertainty caused by the wider macro-economic consequences of the war in Ukraine, will continue to monitor macro-economic developments. The program is also subject to changes resulting from corporate activities, such as material M&A activity.
    

Webcast

Frans Muller, CEO of Ahold Delhaize, comments, “As Ahold Delhaize and our great local brands aim to help people eat well, save time and live better every day, we continuously look for ways to bring our purpose to life. In 2022 for example, our Save For Our Customer program generated cost savings of €979 million which enabled us to invest back in our value proposition to keep groceries affordable.” 
 

Leading Together strategy 

Throughout the last years, the Leading Together strategy has proven to be the right way forward, and 2022 was no exception. The strategy once again provided a clear decision-making framework, as we navigated another turbulent year with the war in Ukraine and record-high inflation. At our Investor Day at the end of 2021 we introduced four key priorities to help us deliver on this strategy: customers, operations, portfolio and health & sustainability.  
 

For customers 

Ahold Delhaize is continuously improving its omnichannel customer experience, allowing customers to shop whenever and wherever they want. An example of our customer priority is that of Stop & Shop deploying its same-day online delivery and 2-hour click & collect across its markets. Furthermore, Food Lion To Go’s pickup service is now available in 655 stores with 50 more planned for 2023. At year end, Ahold Delhaize had 1,547 click & collect points in the U.S., which means that 97.5% of our U.S. customers now have access to our online grocery offerings.

For operations 

In the area of operations, we look back on Peapod Digital Labs launching its store-picking app for PRISM brands which reduced errors by 33%, making work easier for associates. Alfa Beta, Delhaize Serbia and Mega Image worked closely together with our European IT team to build a system that replenishes stock in stores. It uses algorithms that forecast store needs based on sales, sending orders directly to the distribution centers. So far, it has been rolled out to 1,700 stores, covering about 70% of the assortment. 

For portfolio 

Our global portfolio of great local brands was strengthened by the cooperating agreement Albert Heijn entered into with Jan Linders Supermarkets in the south of the Netherlands that will convert the majority of Jan Linders stores into Albert Heijn franchise supermarkets. To top it off, Albert Heijn closed 2022 with a market share of 37.0%. 

For Health & Sustainability  

Last but not least, health and sustainability are a key part of our strategy, and many advances were made in this area. Stop & Shop earned the ‘Mass Save Climate Leader’ award for saving 30,000 mWh over the last 5 years. Albert introduced the first zero food waste store in the Czech Republic and was also the first retailer to test a hydroponic system that grows herbs and leafy vegetables on the sales floor. Giant Food expanded its Fresh Connect program where participants can use prepaid debit cards prescribed by healthcare providers to purchase fresh fruits and vegetables at their local Giant Food. Mega Image installed solar systems across 20 stores and Delhaize Belgium announced it will add 1,800 fast electric car charge points. 

Ahold Delhaize also updated its interim CO2 emissions reduction target for its entire value chain (scope 3) to at least 37% by 2030. Within our group of local brands, Albert Heijn is a frontrunner in this area, adapting its CO2 reduction ambition in its supply chain from 15% to 45% by 2030. 

All in all, our brands understand and serve the unique needs of local customers and communities while benefiting from the economies of scale and efficiency of an international business. 
 

Community support and charitable donations  

Every year, our brands support many causes that are important to local communities, for example, fighting hunger through financial donations and by diverting surplus food to food banks and charities. In 2022, our family of great local brands’ total donations in cash and monetary value of donated products and food rounded to €218 million. The sum of donations by customers to charities, in cash and cash equivalent, facilitated by our great local brands was over €48 million.  
 

Some examples of our brands’ community support and charitable donations include the following:  

• Hannaford launched its “Eat Well, Be Well – A Path to Better Health” initiative that will provide $1.5 million in funding to non-profit organizations to host programs that increase access to healthy, fresh food tailored to the specific needs of an individual’s health conditions, as well as nutrition education. 
• Albert committed to increasing food support by 20% – a total of 2,300 tonnes or 4.6 million portions of food. It also donated seven delivery vans with cooling systems to help local food banks keep food fresher for longer. 
• Food Lion Feeds donations amounted to more than $1.1 million and achieved a monumental milestone with its one billionth meal donated and is well on the way to reaching its goal of 1.5 billion meals by 2025. 
• Mega Image’s 12 Acts of Kindness internal volunteering program launched a “Caring for people has no borders” volunteering campaign in partnership with the Romanian Red Cross. Since then, more than 30 volunteers have gotten involved and committed to helping where necessary. 
   

Humanitarian aid for Ukrainian civilians  

Our European brands jumped into action when the war in Ukraine unfolded and provided crucial support to those affected. For example, Mega Image in Romania donated food and hygiene materials to refugee centers in cooperation with the Red Cross and a local NGO. Local associates also donated blood and waited at the central train station for displaced Ukrainians to offer a hot meal and comfort. 
 

Albert in the Czech Republic sent hundreds of pallets of food and non-food supplies to food banks, refugee centers and affected cities in Ukraine, in cooperation with the Federation of Food Banks, non-profit partners and the Ukraine embassy. And in December, Delhaize Belgium donated emergency generators to the Ukrainian Red Cross, ensuring 95,000 Ukrainians will have access to clean water and heating.  

Overall, Ahold Delhaize and our brands in Europe donated more than €1.5 million in cash and in-kind support, and generated an additional €1.2 million in customer and associate donations to organizations like the Red Cross to provide humanitarian relief. 

Learn more about our Q4 and full year financial results in the video below: 

 

Zaandam, the Netherlands, November 9, 2022 – Ahold Delhaize, one of the world’s largest food retail groups and a leader in both supermarkets and e-commerce, reports third quarter results today.

Summary of key financial data

Comments from Frans Muller, President and CEO of Ahold Delhaize

"Empowering customer choice by providing great value and easy access to affordable and healthy food options is at the center of the customer value proposition in all of our nineteen great local brands. Our positive market share development and resilient financial performance in Q3 highlights the trust customers continue to place in our brands. I am proud of these results and of our associates who consistently rise to meet the demands of these challenging times.

"Comparable store sales ex gas increased 7.9% in Q3, with an acceleration in growth rates in both the U.S. and Europe to 8.2% and 7.4%, respectively. The vast majority of our leading local brands continue to gain or maintain market share. Notably, during the quarter, our two biggest brands achieved significant milestones. Food Lion reached a decade of consecutive quarters of positive comparable sales growth, which is a remarkable achievement. Albert Heijn continues to win market share by focusing on providing value for customers in an increasingly challenging environment. This quarter included a new, traffic-generating ‘100 items under one euro’ campaign as well as an expansion to 1,600 ‘Prijsfavorieten’ (Price favorites), which include top-quality own-brand daily products at affordable prices. Albert Heijn Premium also passed the 600,000-member subscription mark this quarter.

"High inflation, increasing interest rates, slowing economic growth and the war in Ukraine are putting intense pressure on customers' household budgets. At the same time, retailers and suppliers alike are also facing rising costs of doing business. High energy prices, for example, are not just a cost headwind but are also disrupting supply chains, which are still fragile in many parts of the world. With a deep understanding of commodity prices, built through our extensive experience with own-brand products, our teams play an important role in the value chain and work hard on behalf of customers to ensure realistic pricing. In the face of increasing price pressures, it is everyone's job, across the value chain, to keep prices as low as possible for customers. To this end, we continue to engage diligently and proactively with partners, making clear choices on assortment when necessary. We are also adapting our organization and processes to rising costs by increasing efficiencies and mitigating costs wherever practical and possible.

"Building on strong sales growth, we delivered an underlying operating margin of 4.4% and diluted underlying EPS growth of 31.6% in Q3. Our results were again influenced by foreign exchange and interest rate changes as well as other items. In the U.S., our 5% underlying operating margin was positively impacted by 0.3 percentage points from the release of a provision on our self-insurance program. This resulted from, among other things, many years of strong efforts to improve workplace safety. In Europe, our Q3 underlying operating margin showed a slight improvement compared to Q2, despite a more pronounced impact from rising energy and utility costs. Since we last communicated in August, we have seen further increases in per-MwH prices, which will continue to weigh on our European margins in the coming quarters.

"On an IFRS-reported basis, our operating margin was 4.0%. There were two main impacts that led to these results. First, we took an impairment charge of €187 million on FreshDirect, which negatively impacted the reported IFRS U.S. operating margin, largely related to the broad based re-rating of sector valuations and reduced scope of that business that is now predominantly focused on the New York Tri-State area. And second, on an IFRS-reported basis, the European operating margin benefited from the release of a wage tax provision in Belgium amounting to €62 million.

"So, while we can't control external factors like energy prices, we have continued to work diligently on things that are under our control, and I am pleased we are making good progress. For example, at Stop & Shop, we continue to advance on our remodeling program, with over 40% of the store fleet now remodeled since 2018. An important focus area for Stop & Shop is New York City, where we announced a multi-year $140 million investment earlier this year. With the first five store remodels completed, we are encouraged to see all stores trending ahead of plan, with the sales lift driven by increased units and new customer transactions. In addition, the introduction of Stop & Shop's new Deal Lock savings program, which helps customers capture value by locking in a specific sales price for multiple weeks on both national and private brands, is delivering strong early chain-wide results. Delhaize Belgium also saw a material improvement in comparable store sales supported by the first full quarter of its Little Lions everyday low price program and enhancements to its SuperPlus initiative. At bol.com, net consumer online sales were up 5.6% in Q3, with a market share gain of well over one percentage point year to date. This was driven by double-digit growth in third-party partner network sales. And while the market is still challenging, the brand is well positioned to maximize the holiday season opportunity, supported by 'The Big Toy Book' and the logistical strength of its new distribution facility, which opened earlier this year.

"Taking a step back and looking at the big picture, I am equally encouraged about our progress on the key levers of our Leading Together strategy. Our omnichannel transformation is central to this strategy, driven by customers' desire to shop whenever and wherever they want. In Q3, net consumer online sales increased by 11.5%. Our online grocery sales were up 16.9% with strong growth in both regions as we continued to invest in new and innovative high-tech omnichannel solutions. Our Save for Our Customers cost savings program remains on track to produce savings of more than €850 million in 2022. These annual programs help our great local brands absorb cost increases to invest in better customer propositions and to keep shelf prices as low as possible. On another of our strategic initiatives, to generate €1 billion in complementary revenues by 2025, we also took important steps to bolster our digital advertising capabilities. We announced the acquisition of a minority stake in Belgian adtech company Adhese, which will provide an important part of the tech stack and third-party integration to help scale our capabilities and increase services for advertisers and publishers in Europe. In the U.S., Peapod Digital Labs announced plans to build an end-to-end, in-house retail media business, building on the existing AD Retail Media network. With this step, Ahold Delhaize USA creates a simplified way to engage omnichannel customers at the largest grocery retail group on the East Coast.

"We believe it is important to continue to make progress on elevating our Healthy and Sustainable strategy during these challenging times. It is clear from the science that more structural actions are needed to combat climate change, and we are encouraged to see that the current energy crisis is stimulating creative thinking and driving the transition to renewable energy. Our brands continue to work hard to bring meaningful initiatives to customers in stores and online. We are well on track to again deliver on key milestones related to growing our share of healthy sales, decreasing food waste and reducing the carbon emissions of our own operations. We believe that every step, no matter how big or small, counts. And our brands continue to show that it is not just about the numbers, there is real customer benefit as well. For example, Albert Heijn recently introduced its ‘Leftovers’ program to reduce food waste but also provide value to customers by enabling them to buy products approaching 'best by' or 'expiry' dates at lower prices. Our Albert brand in the Czech Republic became the first retailer to test a hydroponic system that grows herbs and leafy vegetables on the sales floor and also introduced a zero waste kitchen, turning leftover food from three stores into meals for over 100 associates.

"In conclusion, despite increasing macro-economic and geopolitical challenges, we continue to make important progress on delivering our strategy. Better-than-expected underlying U.S. results, foreign exchange benefits, and continued insurance gains from rising interest rates allow us to raise our full year diluted underlying EPS guidance to low-double-digit growth. Operational excellence, tight cost control and disciplined capital allocation continue to be important in these times. As such, we are working hard on a variety of initiatives across the company to maintain our industry-leading position of consistent and reliable performance, dependable cash flows and shareholder returns. This is a track record we are proud of, and, in light of our continued expectations of strong free cash flow generation going forward, we are announcing the continuation of our annual share buyback program in 2023. As always, striking the appropriate balance between supporting our associates, investing in our customers and local communities, prioritizing our digital and omnichannel transformation and playing our part in the transition to a healthy and sustainable food system will guide our decision making. Our proactive culture, our scale and our agility position us well – a testament to the strength of our company and our business model."

Q3 Financial highlights

Group highlights

Group net sales were €22.4 billion, an increase of 9.1% at constant exchange rates, and up 20.8% at actual exchange rates. Group net sales were driven by positive contributions from comparable sales growth excluding gasoline of 7.9%, foreign currency translation benefits, and higher gasoline sales. Q3 Group comparable sales benefited by approximately 0.2 percentage points from the net impact of calendar shifts and weather.

In Q3, Group net consumer online sales increased by 11.5% at constant exchange rates, led by a robust performance in the U.S. and a return to growth in Europe, where the difficult year-over-year comparisons that pressured first half results eased. Net consumer online sales in grocery increased 16.9% at constant exchange rates.

In Q3, Group underlying operating margin was 4.4%, consistent with Q3 2021 at constant exchange rates, reflecting strong cost savings and favorable insurance results, which helped offset higher labor, distribution and energy costs. In Q3, Group IFRS-reported operating income was €887 million, representing an IFRS-reported operating margin of 4.0%.

Underlying income from continuing operations was €696 million, up 27.3% in the quarter at actual rates. Ahold Delhaize's IFRS-reported net income in the quarter was €589 million. Diluted EPS was €0.59 and diluted underlying EPS was €0.70, up 31.6% at actual currency rates compared to last year's results and 18.2% at constant currency rates. In the quarter, 7.1 million own shares were purchased for €188 million, bringing the total year-to-date amount to €711 million through the first nine months. 

U.S. highlights

U.S. net sales were €14.7 billion, an increase of 8.8% at constant exchange rates and up 27.4% at actual exchange rates. U.S. comparable sales excluding gasoline increased by 8.2%, benefiting by approximately 0.4 percentage points from the net impact of weather and calendar shifts. Food Lion continued to lead brand performance, celebrating 40 consecutive quarters of positive sales growth.

In Q3, online sales in the segment were up 20.8% in constant currency. This builds on top of 52.9% constant currency growth in the same quarter last year. 

Underlying operating margin in the U.S. was 5.0%, up 0.2 percentage points at constant exchange rates from the prior year period. Q3 U.S. underlying operating margins benefited by 0.3 percentage points from a favorable reserve release impacted by various safety programs. In Q3, U.S. IFRS-reported operating margin was 3.9%, mainly impacted by an impairment charge in the amount of €187 million for FreshDirect.

Europe highlights

European net sales were €7.7 billion, an increase of 9.6% at constant exchange rates and 10.0% at actual exchange rates. These sales also benefited slightly from the 2021 acquisition of 38 stores from DEEN in the Netherlands, which was lapped late in Q3. Europe's comparable sales excluding gasoline increased by 7.4%, as shelf inflation accelerated in the quarter, and year-over-year comparisons eased versus a difficult first half of the year. Q3 Europe comparable sales were negatively impacted by approximately 0.1 percentage points from calendar shifts.

In Q3, net consumer online sales in the segment increased by 6.1%, following 20.1% growth in the same period last year. Net consumer online growth was driven in large part by strong grocery sales, where Ahold Delhaize's robust online solutions continue to serve consumers well. While non-food e-commerce market conditions in the Benelux remained soft, bol.com continued to gain market share, enabling it to generate positive net consumer online sales growth of 5.6% in the quarter, a sequential improvement versus the prior quarter. Bol.com's net consumer online sales from its more than 50,000 third-party sellers grew at 11% in Q3 and represented 59% of sales.

Underlying operating margin in Europe was 3.4%, down 0.9 percentage points from the prior year due to volume deleveraging and escalating energy and other cost pressures. Europe's Q3 IFRS-reported operating margin was 4.1%, positively impacted by the release of a wage tax provision in the amount of  €62 million.

Outlook 2022

Despite challenging macro-economic operating conditions, our Q3 results provide us with the ability to again increase our full year EPS outlook. We now forecast low-double-digit 2022 diluted underlying EPS growth, versus the prior guidance of growth at a mid-single-digit range.

Ahold Delhaize's 2022 Group underlying operating margin is expected to be at least 4.0%, in line with the Company's historical profile. Management believes that the Company's brands continue to offer consumers a strong shopping proposition and are well-positioned to maintain profitability in the current inflationary environment. Ahold Delhaize's Save for Our Customers initiative is on track to deliver more than €850 million in savings in 2022, which is helping to offset cost pressures related to inflation and supply chain issues, along with the negative impact to margins from increased online sales penetration. 

The 2022 free cash flow outlook remains at approximately €2.0 billion, with net capital expenditures expected to total approximately €2.5 billion. As labor and raw material costs remain high, we reiterate our commitment to exercise discipline in executing and phasing the timing of investments, in order to ensure hurdle rates and return on capital metrics are achieved.

In addition, Ahold Delhaize remains committed to its dividend policy and share buyback program, as previously stated. We are on track to increase our full-year dividend within our 40-50% payout range, in line with our policy, and we are executing our €1 billion share repurchase program in 2022 as planned. Ahold Delhaize also announces a new €1 billion share buyback program to start at the beginning of 2023³.

1. Excludes M&A.
2. Calculated as a percentage of underlying income from continuing operations.
3. Management remains committed to the share buyback and dividend program, but, given the uncertainty caused by the wider macro-economic consequences of the war in Ukraine and COVID-19, will continue to monitor macro-economic developments. The program is also subject to changes resulting from corporate activities, such as material M&A activity.
    

Webcast

Zaandam, the Netherlands, August 10, 2022 – Ahold Delhaize, one of the world’s largest food retail groups and a leader in both supermarkets and e-commerce, reports second quarter results today.

The interim report for the second quarter and half year 2022 can be viewed and downloaded at www.aholddelhaize.com.

Summary of key financial data

Comments from Frans Muller, President and CEO of Ahold Delhaize

"I am pleased to report we had a strong second quarter. Our overall results confirm the strength and breadth of our brand portfolio. Our brands' unparalleled understanding of customers, broad assortments and product offerings as well as the stickiness of food-at-home consumption are giving us the opportunity to play to our strengths and support customers in a challenging environment.

"For consumers and businesses alike, these are difficult times. The war in Ukraine is causing an unprecedented energy crisis, commodity prices are high, and inflation has reached record levels. Consumers’ household budgets are under pressure and household purchasing power is declining. Our brands are laser focused on supporting customers and helping them to manage their spending efficiently. Our brands do this by ensuring access to affordable, healthy food options, expanding their high-quality own-brand assortments, introducing more entry-priced product solutions, and ensuring our highly tailored omnichannel loyalty programs offer competitive and attractive solutions across all customer touchpoints. Our cost reduction programs also help Ahold Delhaize's great local brands absorb cost increases relating to energy, transport and labor, enabling us to keep prices as low as possible.  

"By consistently executing our strategy, our brands again built on the prior quarter results, delivering sequential improvement in comparable sales across all brands compared to Q1. This is reflected in our results, with 4.7% growth in comparable sales excluding gas and diluted underlying earnings per share up 11.0% at actual rates to €0.59, exceeding our original expectations. Our brands' strong value propositions are reflected in increased market shares in the majority of our markets.

"This is particularly visible in the U.S., where the consistent and robust performance of our U.S. brands continued. In the quarter, net sales increased by 7.7% at constant rates, and we maintained a healthy underlying operating profit. Net consumer online sales grew by 16.4% during the quarter. Food Lion continues to perform strongly, achieving its 39th consecutive quarter of growth and double-digit comparable sales. Stop & Shop has taken the next steps in its remodeling program with the announcement of a      $140 million investment across its New York City stores over the next two years. This targeted investment aims to improve the shopping experience for local customers by adding thousands of new products to the assortment that reflect the diversity of the neighborhoods and communities Stop & Shop serves.

"Turning to Europe, net sales increased 4.2% at constant rates. Despite continuing to cycle prior year lockdown measures in the Benelux, we saw a good improvement in comparable sales, with growth of 1.8% compared to a negative performance in Q1. This was supported by solid market share gains at Albert Heijn and bol.com as well as gains in the Central and Southeastern Europe (CSE) region. With the European economic climate becoming much more dynamic over the last year, operational excellence, tight cost control and disciplined capital allocation are paramount. As such, our teams are leaning in on three key areas, to boost profitability performance to be more in line with Group levels as well as reinforce our strategic focus to drive omnichannel market share.

"Firstly, we will focus on driving volume, market share and customer loyalty with a dedicated program for these tough times. This includes a strong focus on leveraging everyday low-price programs and own-brand product development. As of Q2, brands in all our European markets have introduced tailored high-quality, better-taste entry-priced programs. In Belgium, for example, Delhaize launched ‘Little Lions,’ optimizing its price/value equation on 500 of its most purchased own-brand products. After the program's first month, Delhaize has already seen a 15% increase of Little Lions product sales. Secondly, we are lowering our structural costs wherever possible to empower people, create more agile organizations and capture scale. One such initiative is a new joint CSE strategy that leverages brand proximity to address similar challenges with common solutions between the markets. In Belgium, we have also identified short- and medium-term operational and structural opportunities, and expect to see a stabilization of margin levels and improvements later this year. Finally, we are re-prioritizing and consolidating investments to reflect the current dynamic climate. An important example of this is a revised investment plan at bol.com. This new plan, which follows a modular approach, is less capital intensive while continuing to support bol.com's mid-term ambitions and growing infrastructure needs. Taking all of these measures together, we expect to unlock between €250 and €300 million in additional cost savings cumulatively in the next three years.

"Our Leading Together strategic priorities, particularly our omnichannel transformation, remain central to our agenda. We see that customers value our omnichannel ecosystems, which offer them the flexibility and convenience of shopping whenever and wherever they want. In Q2, Group net consumer online sales increased by 4.8% at constant exchange rates. This includes 16.4% growth in the U.S. offset by a 1.1% decline in Europe. At bol.com, net consumer online sales declined by 2.1% during the quarter, on top of 24.2% growth in Q2 2021. This represents a sequential improvement compared to Q1 2022 as bol.com again strongly outperformed the e-commerce market, which is estimated to have declined at a high-single-digit rate. Excluding bol.com, net consumer online sales increased by 11.5% at constant rates, as online grocery penetration rates continued to increase.

"Looking to the future, we remain strongly focused on our ESG ambitions. For a long time, sustainability has had a central position in our organization. It is one of our four key strategic focus areas, and a critical driver of our purpose: Eat well. Save time. Live better. With the recent appointment of Jan Ernst de Groot as our Chief Sustainability Officer, we will ensure that the full scope and dimension of sustainability and ESG are holistically represented at the Executive Committee level.

"In Q2, we again have many highlights to share. Of particular note is the publication of our second Human Rights Report in June. In addition, Ahold Delhaize also maintained its MSCI ESG 'AA' rating, with improvements noted in several criteria. In the U.S., Giant Food has partnered with Loop, a circular reuse platform, to bring reusable packaging solutions to customers. In light of the ongoing climate and energy crisis, and the importance of switching to renewable energy sources, Albert Heijn is accelerating the sustainability of transport to stores and customers by increasing the number of electric trucks and delivery cars it uses, starting with a 100% electric delivery fleet in 2022 for The Hague city center, with Rotterdam, Utrecht and Amsterdam to follow in 2023. The brand aims to switch completely to biofuels for all transport by 2024 and to no longer rely on gas for climate control in stores in the Netherlands and Belgium by 2023.

"Despite the expectation that challenging times remain ahead, I am confident that our brands are on the right path to support customers and deliver on our goals. Our half-year results exceeded our expectations. We have positive momentum going into the second half of the year. Based on the strong U.S. performance, we now expect underlying EPS to increase by mid-single digits compared to 2021 and free cash flow to be approximately €2.0 billion compared to the guidance we gave in May. Given the strength of our underlying operations and our medium-term investment plans, including the new lower capital intensity plan at bol.com, we now expect cumulative free cash flow of around €7.5 billion for the period 2022 to 2025, compared to our original expectation of over €6 billion.

"Finally, let me also provide an update on our intentions to sub-IPO bol.com. Considering current equity market conditions, we have decided that the second half of 2022 is no longer the right time to sub-IPO  bol.com. We remain committed to securing the right future path to unlock value for bol.com and Ahold Delhaize, and will revisit opportunities when market conditions are more conducive. As such, our immediate priority is to ensure that bol.com continues to leverage its leadership position and execute its strategic growth agenda with a strong return on capital."

Q2 Financial highlights

Group highlights

Group net sales were €21.4 billion, an increase of 6.4% at constant exchange rates, and up 15.0% at actual exchange rates. Group net sales were driven by positive contributions from comparable sales growth excluding gasoline of 4.7%, foreign currency translation benefits and, to a lesser extent, by the DEEN acquisition and higher gasoline sales. Q2 Group comparable sales benefited by approximately 0.8 percentage points from calendar shifts relating to the timing of Easter.

In Q2, Group net consumer online sales increased by 4.8% at constant exchange rates, led by a robust performance in the U.S., which was partly offset by the cycling of a strong Q2 2021 in Europe at bol.com. Excluding bol.com, net consumer online sales increased 11.5% at constant exchange rates.

In Q2, Group underlying operating margin was 4.1%, down 0.4 percentage points compared to Q2 2021 at constant exchange rates, mainly reflecting higher labor, distribution and energy costs, and an unfavorable mix effect compared to the prior year period. In Q2, Group IFRS-reported operating income was €895 million, representing an IFRS-reported operating margin of 4.2%.

Underlying income from continuing operations was €593 million, up 7.6% in the quarter at actual rates. Ahold Delhaize's IFRS-reported net income in the quarter was €603 million. Diluted EPS was €0.60 and diluted underlying EPS was €0.59, up 11.0% at actual currency rates compared to last year's results. In the quarter, 9.5 million own shares were purchased for €255 million, bringing the total amount to €523 million in the first half of the year. The 2022 interim dividend is €0.46, up 7% versus the prior year, and, in line with the Group's dividend policy, represents 40% of first half 2022 underlying income per share from continuing operations.

U.S. highlights

U.S. net sales were €13.6 billion, an increase of 7.7% at constant exchange rates, and up 22.1% at actual exchange rates. U.S. comparable sales excluding gasoline increased 6.4%, benefiting by approximately 0.9 percentage points from calendar shifts. Food Lion continued to lead brand performance, with 39 consecutive quarters of positive sales growth.

In Q2, online sales in the segment were up 16.4% in constant currency. This builds on top of the strong 61.0% constant currency growth in the same quarter last year. 

Underlying operating margin in the U.S. was 4.7%, down 0.3 percentage points at constant exchange rates from the prior year period. In Q2, U.S. IFRS-reported operating margin was also 4.7%.

Europe highlights

European net sales were €7.9 billion, an increase of 4.2% at constant exchange rates and 4.5% at actual exchange rates. These sales also benefited from the 2021 acquisition of 38 stores from DEEN in the Netherlands. Europe's comparable sales excluding gasoline increased 1.8% due in part to a positive impact of approximately 0.7 percentage points from calendar shifts.

In Q2, net consumer online sales in the segment were down 1.1%, following 27.0% growth in the same period last year. The decline was due to weak non-food e-commerce market conditions in the Benelux, which contracted at a high-single-digit rate as brick-and-mortar non-food retail sales recovered from prior year lockdown measures. Bol.com's percentage of net consumer online sales from its nearly 50,000 third-party sellers was 61% in Q2.

Underlying operating margin in Europe was 3.4%, down 0.8 percentage points from the prior year due to volume deleveraging, particularly in the Benelux from lapsed benefits of lockdown restrictions, as well as significant price competition in Belgium and Greece. Europe's Q2 IFRS-reported operating margin was 3.5%.

Update on bol.com sub-IPO intentions

Ahold Delhaize first announced its intention to explore a sub-IPO for bol.com at its November Investor Day 2021, in order to build on the remarkable success, customer loyalty and leadership position of bol.com as a retail tech platform. We believe strongly in the value and potential of bol.com, underpinned by its continued strong market share gains as well as its industry leading customer and partner satisfaction scores.

Considering current equity market conditions, we have decided that the second half of 2022 is no longer the right time to sub-IPO bol.com. We remain committed to securing the right future path to unlock value for bol.com and Ahold Delhaize, and will revisit opportunities when market conditions are more conducive. As such, our immediate priority is to ensure that bol.com continues to leverage its leadership position and execute its strategic growth agenda with a strong return on capital.

Like other companies in Europe, bol.com is adjusting to a more dynamic economic climate. Therefore, we have completed a detailed review of bol.com's medium-term growth and investment plan, to provide additional flexibility and agility going forward. In particular, we have identified a less capital intensive, modular approach to facilitate bol.com's infrastructure needs to support and deliver against its compelling growth and expansion opportunities. In the medium term, our new plans will ensure we remain in a strong position to grow faster than the market, yield a healthy double-digit sales and EBITDA compound annual growth rate, and deliver above Group average return on capital.

Outlook 2022 and update to 2025 Investment Plan

While current macro-environment trends, including high rates of inflation and rising energy costs, are expected to continue into the second half of the year, our results in the first half of the year provide management with the confidence to raise the underlying EPS growth outlook for 2022 and the free cash flow outlook for 2022.

Ahold Delhaize's 2022 Group underlying operating margin is expected to be at least 4.0%, in line with the Company's historical profile. Management believes that the Company's brands continue to offer consumers a strong shopping proposition and are well-positioned to maintain profitability in the current inflationary environment. Despite significant cost increases, Ahold Delhaize's Save for Our Customers initiative is expected to deliver more than €850 million in savings, which should help offset cost pressures related to inflation and supply chain issues, along with the negative impact to margins from increased online sales penetration. 

Based on the strong half-year earnings as well as other macro-economic, foreign exchange and interest rate factors, we are raising underlying EPS guidance for 2022. We now expect underlying EPS to grow at a mid-single-digit rate relative to 2021 versus our original outlook of a low- to mid-single-digit decline relative to 2021 and our updated outlook, announced in May, of growth remaining comparable with 2021 levels.

The 2022 free cash flow outlook has also been raised to be approximately €2.0 billion, compared to the previous outlook of approximately €1.7 billion. Net capital expenditures are expected to total approximately €2.5 billion. As labor and raw material costs remain high, we reiterate our commitment to exercise discipline in executing and phasing the timing of investments, in order to ensure hurdle rates and return on capital metrics are achieved.

Given the strength of our underlying operations and our medium-term investment plans, which include lower capital intensity at bol.com, we now expect cumulative free cash flow of around €7.5 billion for the period 2022 to 2025, compared to our original expectation of over €6 billion. Total capital expenditure for the Company as a percentage of sales is expected to be around 3% (previously 3.5%). We will continue to focus these investments on our food omnichannel transformation, including our store networks, automation, monetization and last-mile delivery infrastructure, as well as furthering our efforts to reduce our climate impact.

In addition, Ahold Delhaize remains committed to its dividend policy and share buyback program, as previously stated. We are on track to increase our full-year dividend within our 40-50% payout range, in line with our policy, and we are executing our €1 billion share repurchase program in 2022 as planned.

1. Excludes M&A.
2. Calculated as a percentage of underlying income from continuing operations.
3. Management remains committed to the share buyback and dividend program, but, given the uncertainty caused by COVID-19, will continue to monitor macro-economic developments. The program is also subject to changes resulting from corporate activities, such as material M&A activity.
    

Webcast

Zaandam, the Netherlands, May 11, 2022 – 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.

Summary of key financial data

1. Not meaningful, as free cash flow is negative in Q1 2022.

Comments from Frans Muller, President and CEO of Ahold Delhaize

"I am pleased to report a strong start to the year for Ahold Delhaize. In times like these, our strong global portfolio of local brands provides distinct competitive and societal advantages. This allows us to successfully navigate short-term market volatility and, at the same time, provide financial stability and operational bandwidth to focus on our long term growth agenda.

"Brand strength and relative market share are our most important measures of success. Our performance on these metrics again shone through in our results, with 8.3% growth in net sales to €19.8 billion and diluted underlying earnings per share up 1.3% to €0.55, exceeding our original expectations. Through our 19 great local brands, on the whole, we lapped prior year pandemic lockdowns with further market shares gains and healthy growth rates in our online grocery business while, at the same time, preserving our industry-leading profitability metrics.

"For consumers, Q1 was characterized by significant challenges both within and outside of our markets, headlined by the war in Ukraine. While we do not have direct operations in Ukraine or Russia, I am extremely proud of associates at our brands who quickly jumped into action to provide crucial support to those affected by the war. Our brands in Europe, together with Ahold Delhaize, donated more than €1.5 million worth of cash and in-kind support, and generated an additional €1.2 million in customer and associate donations to organizations like the Red Cross. Several brands are supporting associates who are volunteering their time to provide on the ground support, and are actively promoting jobs to Ukrainian people displaced by the violence. We will continue to provide support for as long as it’s needed.

"We also know that consumers globally are feeling the pressure of high inflation rates. We are working hard with suppliers to mitigate price increases where possible and ensuring that increases are realistic and necessary. Moreover, Ahold Delhaize’s local brands are helping customers manage their shopping baskets efficiently, by providing great value offers spearheaded by omnichannel loyalty programs, prioritizing healthy food options through Guiding Stars- and Nutri-Score-linked promotions, and expanding the assortment and availability of high-quality lower-cost own-brand products and bulk offerings.

"For example, The GIANT Company doubled points earned on the purchase of all Guiding Stars-rated items. Meanwhile, Giant Food expanded its “More for You” value campaign with the introduction of a bulk item aisle, offering consumers savings on larger-sized products. Also in Europe, a good example is Alfa Beta, which launched a new promotional campaign called Top Hits, offering discounts on key items. By the end of the first half of 2022, all European markets will have their own tailored entry price favorites programs.

"Our brands are laser focused on helping consumers manage their spending, proactively highlighting savings opportunities. For example, own-brand assortments, which offer great quality at a reduced cost versus national brands, are being positioned more prominently and conveniently in stores and the omnichannel shopping journey. In the Benelux, our own-brand portfolios represent over half of all our brands' food sales. In the U.S., own-brand penetration stands at approximately 30% and our brands will continue to invest in and extend their own-brand presence and visibility throughout 2022.

"Looking at our regional performance in more detail, in the U.S., we were able to grow comparable sales by 3.9%, excluding weather and calendar shifts, and maintained relatively stable underlying operating profit in U.S. dollars, as strong food-at-home demand and our cost savings initiatives enabled our brands to mitigate incremental cost pressures. Food Lion, in particular, with its 38th consecutive quarter of growth is one of the top performing brands in the U.S. right now with close to double-digit comparable sales.

"In Europe, the reopening of societies across our markets and a return to normal life for most citizens created a challenging comparison in the Benelux, as we lapped the year-ago quarter when strict lockdown measures boosted sales for both our grocery business and bol.com. This resulted in declining Q1 comparable sales and underlying operating profits for Europe. We see customer trust and loyalty as an important indicator of how well we are doing. This is clearly reflected in the fact that our overall market share is increasing, being particularly robust at Albert Heijn and bol.com.

"To counter the broader market conditions we see in Europe, particularly challenging markets like Belgium, we are focusing on two main approaches to strengthen our brands and connection with customers. Firstly, we are strengthening our commercial proposition by ramping up the rollout of successful pricing and loyalty programs for customers in all our markets and broadening our product offering to ensure affordable options for every wallet. Secondly, cost savings are currently more important than ever to be able to offer customers the most competitive price without sacrificing investments in growth. As such, in the more challenged markets, on top of our running cost savings programs, we are committed to review additional structural costs more aggressively to better align them to the underlying dynamics of the market.

"While short term mitigation actions will keep us busy this year, our Leading Together strategic priorities also remain front and center in our work. Our omnichannel transformation agenda is core to this. Coming off a very strong 2021 which saw a further step up in online gains due to the pandemic, our energy to drive stickiness in our omnichannel ecosystem is paying off. In Q1, Group net consumer online sales only declined by 1.0% at constant exchange rates. This includes 4.6% growth in the U.S., offset by a 3.8% decline in Europe. Excluding bol.com, net consumer online sales increased 4.6%, as online grocery penetration rates continued to increase. We continue to use a blend of organic investment and strategic partnerships to make smart choices as we expand our proposition and reach. For example, in the U.S., we now have over 1,400 pick-up points and have added new instant delivery options with partners. In Europe, Albert Heijn expanded its existing partnership with Deliveroo and Thuisbezorgd.nl.

"At bol.com, sales declined 7% in the quarter, against a market backdrop which is estimated to have been down mid-teens. The strong position of bol.com with customers and partners has therefore again yielded strong market share gains. We continue to make very good progress with the bol.com management team in our preparations to have bol.com ready for a sub-IPO in the second half of 2022, subject of course to market conditions, and other factors. We believe strongly in the value and potential of bol.com. Our intentions remain firmly focused on securing the right future path to unlock value and provide further funding for bol.com and Ahold Delhaize to execute our winning strategy.

"Speaking of the long term, we remain strongly focused on our ESG ambitions, and continued to make strides in this area during Q1. Albert Heijn and bol.com were recognized as industry leaders by the 2022 Sustainable Brand Index. Albert Heijn was voted the most sustainable supermarket chain in the Netherlands for the sixth year in a row and bol.com was recognized as the most sustainable e-commerce brand for the second year in a row. As we continue to support the transition to a healthy and sustainable food system, our U.S. brand Hannaford announced plans to be fully powered by renewable energy by 2024.

"All in all, I am pleased with the performance of the business in what is an increasingly challenging environment. Overall, Q1 results were better than our expectations, despite macro-economic pressures arising from the war in Ukraine. The second quarter is seeing many of the trends from Q1 continuing. Therefore, taking all moving parts together, we expect underlying EPS to be comparable to 2021 with the rest of our full-year guidance metrics unchanged."

Q1 Financial highlights

Group highlights

Group net sales were €19.8 billion, an increase of 3.6% at constant exchange rates, and up 8.3% at actual exchange rates. Group net sales were driven by positive contributions from comparable sales growth excluding gasoline of 0.7%, foreign currency translation benefits, acquisitions, and higher gasoline sales. Q1 Group comparable sales had a net negative impact of approximately 0.5 percentage points from weather and calendar shifts, primarily relating to the timing of Easter.

In Q1, Group net consumer online sales declined by 1.0% at constant exchange rates, as growth in the U.S. was offset by the cycling of a strong Q1 2021 in Europe, particularly at bol.com, arising from last year's lockdowns and the subsequent reopening of societies in Q1 2022. Excluding bol.com, net consumer online sales increased 4.6% at constant exchange rates.

In Q1, Group underlying operating margin was 4.2%, down 0.5 percentage points compared to Q1 2021 at constant exchange rates, reflecting higher labor, distribution and energy costs than in the prior year period. In Q1, Group IFRS-reported operating income was €818 million, representing an IFRS-reported operating margin of 4.1%.

Underlying income from continuing operations was €555 million, down 2.0% in the quarter at actual rates. Ahold Delhaize's IFRS-reported net income in the quarter was €546 million. Diluted EPS was €0.54 and diluted underlying EPS was €0.55, up 1.3% at actual currency rates compared to last year's results. In the quarter, 9.4 million own shares were purchased for €268 million.

U.S. highlights

U.S. net sales were €12.2 billion, an increase of 5.8% at constant exchange rates, and up 13.6% at actual exchange rates. Sales also benefited from favorable foreign currency translation rates, last year's acquisition of stores from Southeastern Grocers, and higher fuel sales. U.S. comparable sales excluding gasoline increased 3.3%. This was partially offset by an unfavorable Q1 net impact to sales of 0.6 percentage points from weather and calendar shifts, primarily relating to the timing of Easter. Brand performance continued to be led by Food Lion, which has now delivered 38 consecutive quarters of positive sales growth.

In Q1, online sales in the segment were up 4.6% in constant currency. This builds on top of the significant 188.3% constant currency growth in the same quarter last year. 

Underlying operating margin in the U.S. was 4.4%, down 0.4 percentage points at constant exchange rates from the prior year period driven by increased labor, distribution and energy costs, which were partially offset by higher pricing and cost savings initiatives. In Q1, U.S. IFRS-reported operating margin was 4.4%.

Europe highlights

European net sales were €7.6 billion, an increase of 0.3% at constant exchange rates and 0.6% at actual exchange rates, driven by the 2021 acquisition of 38 stores from DEEN in the Netherlands. Europe's comparable sales excluding gasoline declined 3.1%. We saw a net negative impact on Q1 comparable sales in Europe of approximately 0.3 percentage points from weather and calendar shifts, primarily relating to the timing of Easter.

Declining Q1 comparable sales in Europe came as the segment lapped strong comparable sales growth excluding gasoline in Q1 2021 of 8.3%. The reopening of societies, particularly in the Benelux, and the resulting shift of some consumer spending back to travel and restaurants contributed to this development. Nonetheless, our market shares across Europe remained strong. Albert Heijn was a particular standout in the quarter, with robust market share gains attributed to strong execution, successful marketing campaigns, sales uplifts resulting from the brand’s store remodeling activities and contributions from the acquired DEEN stores.

In Q1, net consumer online sales in the segment were down 3.8%, following 78.6% growth in the same period last year. At bol.com, our online retail platform in the Netherlands and Belgium, net consumer online sales were €1.3 billion in Q1. This follows net consumer online sales of €1.4 billion in the same quarter last year, when sales at bol.com were aided by lockdown measures limiting brick-and-mortar retail stores.

Bol.com's percentage of net consumer online sales from third-party sellers was 60% in Q1, with nearly 49,000 merchant partners active on the platform.

Underlying operating margin in Europe was 3.5%. This compares to an underlying operating margin of 4.7% in the prior year quarter when margins sustained unusual benefits as a result of lockdown conditions in Europe. Additionally, higher overall costs also impacted margins in Q1. Europe's Q1 IFRS-reported operating margin was 3.4%.

Outlook

While ongoing high rates of inflation, rising costs and supply chain disruptions represent 2022 headwinds, management remains confident in its 2022 outlook following the Company's Q1 results.

Ahold Delhaize's 2022 Group underlying operating margin is expected to be at least 4.0%, in line with the Company's historical profile. Management believes that the Company's brands continue to offer consumers a strong shopping proposition and are well-positioned to maintain profitability in the current inflationary environment. Despite significant product cost increases, Ahold Delhaize's Save for Our Customers initiative is expected to deliver more than €850 million in savings, which should help offset cost pressures related to inflation and supply chain issues, along with the negative impact to margins from increased online sales penetration.

Higher than expected Q1 earnings coupled with a more resilient consumer climate in the U.S. as well as a more favorable U.S. dollar and benefits from favorable insurance results from rising interest rates are forecast to more than offset the challenging economic backdrop in Europe. Based on the current macro-economic outlook, we now expect underlying EPS to be comparable to 2021, compared to our previous guidance of a low- to mid-single-digits decline.

Free cash flow is expected to be approximately €1.7 billion. Net capital expenditures are expected to total a maximum of €2.5 billion, reflecting a step up in the Company's investments in its digital and omnichannel offering to support accelerated sales growth. On the latter, given higher labor and raw material costs, Management remains committed to executing and phasing the timing of investments with the same discipline and focus on achieving required hurdle rates and return on capital metrics. In addition, Ahold Delhaize remains committed to its dividend policy and share buyback program, as previously stated. We expect to again increase our full-year dividend, and we are executing our €1 billion share repurchase program in 2022 as planned.

1. Excludes M&A.
2. Calculated as a percentage of underlying income from continuing operations.
3. Management remains committed to the share buyback and dividend program, but, given the uncertainty caused by COVID-19, will continue to monitor macro-economic developments. The program is also subject to changes resulting from corporate activities, such as material M&A activity.
    

** Two-year comparable sales growth is a stack of the comparable sales growth excluding gasoline in the current year period added to the comparable sales growth excluding gasoline in the prior year period. This measure may be helpful in improving the understanding of trends in periods that are affected by variations in prior-year growth rates.

Zaandam, the Netherlands, February 16, 2022 – Ahold Delhaize, one of the world’s largest food retail groups and a leader in both supermarkets and e-commerce, reports fourth quarter results today.

The summary report for the fourth quarter 2021 can be viewed and downloaded at www.aholddelhaize.com.

Summary of key financial data

1. Not meaningful, as Q4 2020 Group operating income at constant rates and operating income in the U.S. were losses, and diluted EPS was negative in Q4 2020.

Comments from Frans Muller, President and CEO of Ahold Delhaize

"We ended 2021 on a strong note, with positive Group Q4 comparable sales momentum and stable Group margins, positioning us for a strong start to the next phase of our Leading Together strategy announced last November. Looking back on the past year, I am most proud of how associates brought our values to life in the way they responded to ongoing developments associated with COVID-19 and natural disasters throughout our brands' markets, including major floods in Belgium, tornadoes in the Czech Republic, fires in Greece and Hurricane Ida in the U.S. Through it all, associates rose to the challenge to care for customers and communities. As a result, we enter 2022 with deeper relationships and trust across our brands' markets and stronger market shares to build upon.

"For the full year, our COVID-19 care investments totaled €364 million, which included our commitment of €20 million in additional 2021 charitable donations spread evenly between the U.S. and Europe. In total, our brands, combined, contributed over €199 million in monetary value to charitable initiatives across the globe in 2021. The pandemic has shown us the importance of maintaining food and product supplies to local communities – a vital role that we remain focused on fulfilling, together with our brands and suppliers.

"Our financial results in 2021 significantly exceeded our original expectations, with positive full-year comparable sales growth and stable 52-week comparable underlying earnings compared to record results in 2020. This was despite supply chain challenges, increasing inflationary pressures and the dilutive effect as we continue to rapidly expand our omnichannel proposition. Our investment in our omnichannel platform once again proved its worth during 2021, with Group net consumer online sales growing by more than 38% compared to 2020, representing a two-year stack growth of more than 105%. This positively impacted our 2021 Group net sales, which, at €75.6 billion, remained elevated – up 3.3% versus 2020 at constant rates.

"In Q4, we maintained the momentum built throughout 2021, and produced Group two-year comparable sales stack growth of 14.2%, accelerating from the 12.2% growth achieved during Q3.

"In the Netherlands, we successfully converted all 38 stores acquired from DEEN to the Albert Heijn banner during the quarter. The converted stores are performing well and contributing to Albert Heijn's strong market share gains, which were leading among Dutch food retailers during 2021. In 2022, the brand is committed to building on its recent expansion into new channels, with its Albert Heijn to go format scheduled to open at an additional 18 BP fueling stations, following the introduction at 86 locations in late 2021. Its new online subscription program – Albert Heijn Premium – launched in Q4 and is also off to a strong start, with well over 300,000 subscribers through February.

"To advance its omnichannel offerings in the U.S., Giant Food launched online marketplace solution Ship2me, initially offering around 40,000 additional general merchandise and food items. Our U.S. brands also added new click-and-collect locations in Q4, for a total addition of 270 in 2021.

"As we enter 2022, we will accelerate our omnichannel investments to capture the incremental growth opportunities we see over the horizon, enabled by our platform. Improving omnichannel productivity also remains a very high priority as part of the commitment we announced at our November Investor Day to reach fully allocated profitability in Group e-commerce operations by 2025. It comes as the global COVID-19 pandemic continues to highlight the importance of strong omnichannel food retail operations that offer consumers a variety of shopping options, including robust online offerings.

"In this respect, we are proud of The GIANT Company's new e-commerce fulfillment center that opened in the Philadelphia market in Q4. It is supporting our growth and productivity ambitions for 2022 and beyond. We continue to invest across our entire distribution network and build new digital capabilities.

"This will be particularly visible at bol.com, where we will more than double investments in 2022 as we begin a phase of significant investment in the brand. As we announced at Investor Day, we increased Group capex guidance to ~3.5% of sales for the period 2022 until 2025. Excluding bol.com, our grocery business capex guidance will continue at prior averages ~3%. These additional investments will ensure momentum at bol.com remains strong, and will be funded, amongst other means, by the strong projected free cash flow generation of the grocery business of at least €7 billion for the period 2022-2025.

"In 2021, despite decreasing tailwinds from the COVID-19 pandemic, bol.com net sales increased 21% to €2.8 billion, with net consumer online sales growing 27% to €5.5 billion, fueled by our growing merchant partner network, which now stands at around 49,000. Profitability was also strong, with underlying EBITDA of €166 million keeping pace with the prior year. IFRS-reported operating income was €95 million. The investments we plan in 2022 will kick start a multi-year phase of investment to put the infrastructure in place to match the volume growth we expect in the coming years and build out highly accretive service capabilities in advertising and logistics. We are excited about this chapter in bol.com's evolution and continue to progress on our plans to get bol.com ready for a sub-IPO during the second half of 2022.

"On a final note, during Q4, we were pleased to have earned an upgrade to our MSCI ESG ranking to 'AA' from our previous 'A' ranking. We also maintained our standing as a leader in the Dow Jones Sustainability Index. Our score of 83 out of 100 was well above the industry average 26 points and placed us highest among food retailers in Europe and the U.S.. We expressed our intention to make continued progress on the ESG front through our decision in Q4 to pull forward our commitment to reach net-zero carbon emissions across our brands by no later than 2040. And we will actively apply this lens as we invest in our future. For example, at bol.com, we recently reached an agreement to acquire a majority stake in Cycloon, a green and social delivery expert, which will help support bol.com's growth ambitions and sustainability efforts. As we double down on our efforts to support the transformation of our industry into a healthy and sustainable ecosystem, I look forward to keeping you updated on our progress throughout the year."

Q4 Financial highlights

Group highlights

Group net sales were €20.1 billion, up 0.1% at constant exchange rates, and increased 2.8% at actual exchange rates. Excluding last year's 53rd week, Q4 Group net sales grew by 6.7% at constant exchange rates. Group net sales were driven by positive contributions from comparable sales growth excluding gasoline of 3.2%, acquisitions, and foreign currency translation benefits, which were partially offset by a 53rd week in 2020. Q4 Group comparable sales had a net negative impact of approximately 0.1 percentage points, from unfavorable weather impacts, which were partially offset by favorable calendar shifts.

On a two-year comparable sales stack basis, growth for the Group of 14.2% in Q4 2021 compares to the 12.2% growth posted in Q3.

In Q4, Group net consumer online sales grew 13.2% at constant exchange rates versus a 14-week quarter in 2020, due to continued growth at bol.com and the overall online grocery business. Q4 Group net consumer online sales also benefited from the FreshDirect acquisition. On a 13-week comparable basis, Q4 Group net consumer online sales grew 21.5% at constant exchange rates, which builds on top of 71.7% growth in Q4 2020.

In Q4, Group underlying operating margin was 4.2%, flat compared to the prior year at constant exchange rates, as sales leverage and strong cost-saving initiatives offset higher supply chain costs and inflationary cost pressures. In Q4, Group IFRS-reported operating income was €895 million, representing an IFRS-reported operating margin of 4.4%.

Underlying income from continuing operations was €598 million, up 6.7% in the quarter at actual rates. Ahold Delhaize's IFRS-reported net income in the quarter was €634 million. Diluted EPS was €0.62 and diluted underlying EPS was €0.59, up 10.2% at actual currency rates compared to last year's results. In the quarter, 9.9 million own shares were purchased for €299 million, bringing the total amount for the full year to €1 billion.

2021 diluted underlying EPS of €2.19 increased 28.8% over the 2019 base, and significantly exceeded the Company's original guidance of mid- to high-single-digit growth versus 2019. This upside compared with the original guidance came from strong food-at-home demand and better than expected Group underlying operating margins of 4.4%, compared to original guidance of "at least 4%." This drove strong cash generation, with the Company's €1.6 billion reported free cash flow including payments of $190 million              (~€170 million) for U.S. pensions following 2020 U.S. MEP withdrawals and approximately €380 million related to a disputed Belgian tax claim. Excluding these two items, 2021 free cash flow would have amounted to €2.2 billion.

U.S. highlights

U.S. net sales increased by 1.5% at constant exchange rates (5.9% at actual exchange rates). Excluding last year's 53rd week, Q4 U.S. net sales grew by 9.2% at constant exchange rates. U.S. comparable sales excluding gasoline increased 4.8%. Unfavorable weather negatively impacted Q4 U.S. comparable sales by approximately 0.2 percentage points. On a two-year comparable sales stack basis, growth was 16.0%, accelerating from the 15.3% growth in Q3. Brand performance continued to be led by Food Lion, which has now delivered 37 consecutive quarters of positive sales growth. 

In Q4, online sales in the segment were up 30.5% in constant currency, driven by the continued expansion of click-and-collect facilities and the FreshDirect acquisition. Excluding the FreshDirect acquisition, U.S. online sales grew 7.5% in constant currency, building on top of the significant 128.5% growth in the same quarter last year. 

Underlying operating margin in the U.S. was 4.4%, up 0.5 percentage points at constant exchange rates from the prior year period, driven by reduced COVID-19-related costs and strong cost-savings initiatives. While the absence of one-time costs in the prior year quarter were offset by lapping last year's extra week, Q4 U.S. underlying operating margins benefited by 0.3 percentage points from a favorable reserve release. In Q4, U.S. IFRS-reported operating margin was 5.5%.

Europe highlights

European net sales declined by 1.9% at constant exchange rates and 1.5% at actual exchange rates, driven by a 53rd week in 2020. Excluding last year's 53rd week, Q4 net sales in Europe grew by 3.0% at constant exchange rates. Europe's comparable sales excluding gasoline grew 1.0%. Despite lapping strong comparable sales growth excluding gasoline in Q4 2020 of 10.6%, comparable sales were able to grow year-over-year on the back of continued market share gains. Albert Heijn was a particular standout in the quarter, with positive market share results driven by strong execution, successful marketing campaigns, sales uplifts provided by the brand’s store remodeling activities and the acquired DEEN stores.

A calendar shift positively impacted Q4 comparable sales in Europe by approximately 0.1 percentage points. On a two-year comparable sales stack basis for Q4 2021, growth was 11.6%, an acceleration compared to growth of 7.3% in Q3 2021.

In Q4, net consumer online sales in the segment were up 7.4%, following 73.4% growth in the same period last year. At bol.com, our online retail platform in the Benelux, net consumer sales grew by 7.8% in Q4 (15.3% on a comparable 13-week basis), which comes on top of nearly 70% growth in the same quarter last year. Bol.com's sales from third-party sellers grew 9.1% in the quarter (17.2% on a comparable 13-week basis) representing 56% of net consumer sales, with nearly 49,000 merchant partners on the platform.

Underlying operating margin in Europe was 4.1%. This compares to an underlying operating margin of 5.1% in the prior year quarter when margins sustained unusual benefits from lockdown conditions in Europe. In Q4, Europe's IFRS-reported operating margin was 3.1%.

Outlook

Management remains confident in the Company's ability to grow sales in 2022, as originally indicated during the November Investor Day. Strong sales are expected to result from current trends in consumer behavior favoring more food-at-home consumption and online food purchases, which fit well with Ahold Delhaize's omnichannel business model and growth investments.

While supply chain disruptions, inflation and rising costs as well as the expected easing of government subsidies to consumers pose challenges for the industry in 2022, Ahold Delhaize's Group underlying operating margin is expected to be at least 4.0%, in line with the Company's historical profile. Management believes that the Company's brands continue to offer consumers a strong shopping proposition and are well positioned to maintain profitability in the current inflationary environment. Margins are expected to be supported by a strong Save for Our Customers target of above €850 million. This should help offset cost pressures related to inflation and supply chain issues, along with the negative impact to margins from increased online sales penetration. The 2022 target builds on €967 million of savings from 2021, which significantly exceeded original guidance forecasting savings of over €750 million.

Underlying EPS is expected to decline by low- to mid-single-digits versus 2021, driven primarily by a return to historical margin levels in 2022 compared with elevated 2021 levels.

Free cash flow is expected to be approximately €1.7 billion. Net capital expenditures are expected to total around €2.5 billion, reflecting a step up in the Company's investments in its digital and omnichannel offering to support accelerated sales growth. In addition, Ahold Delhaize remains committed to its dividend policy and share buyback program in 2022, as previously stated. We expect to grow the full-year dividend in 2022 to €0.95 per share, and have previously announced a €1 billion share repurchase program for 2022.

1. Excludes M&A.
2. Calculated as a percentage of underlying income from continuing operations.
3. Management remains committed to the share buyback and dividend program, but, given the uncertainty caused by COVID-19, will continue to monitor macroeconomic developments. The program is also subject to changes in corporate activities, such as material M&A activity.

_{** Two-year comparable sales growth is a stack of the comparable sales growth excluding gasoline in the current year period added to the comparable sales growth excluding gasoline in the prior year period. This measure may be helpful to improve the understanding of trends in periods that are affected by variations in prior-year growth rates.}

Zaandam, the Netherlands, November 10, 2021 – Ahold Delhaize, one of the world’s largest food retail groups and a leader in both supermarkets and e-commerce, reports third quarter results today.

The interim report for the third quarter 2021 can be viewed and downloaded at www.aholddelhaize.com.

1. Not meaningful, as operating income in the U.S. was a loss in Q3 2020.

Comments from Frans Muller, President and CEO of Ahold Delhaize

"Our Q3 results once again showed the resilience of our business model, with our brands building further on 2020's COVID-19-related sales gains, as various societies across our markets reopened in the quarter. During these ever-changing times, we remain proud of the significant efforts of associates in all our brands and businesses, who continue to tirelessly serve our communities. In Europe and the United States, our businesses faced additional disruptions in Q3 related to the Belgian floods, tornadoes in the Czech Republic, fires in Greece and Hurricane Ida in the U.S. We would like to send a special thank you to the affected associates for their continued dedication to their communities during these difficult times, and for truly living our core values.

"We continue to focus on making additional investments to meet associate, customer and community needs and remain on track to deliver on our pledge to contribute €20 million in charitable donations, spread evenly between the U.S. and Europe, during 2021. We also continued to support COVID-19-related health and safety measures, which remain a top priority; we invested €66 million in these measures in Q3. The pandemic has shown us the importance of maintaining food and product supplies to local communities – a vital role that we remain focused on fulfilling, together with our brands and suppliers.      

"Q3 Group net sales of €18.5 billion remained elevated; this was exemplified by the U.S. segment, where comparable sales excluding gasoline grew 2.9% on top of last year's double-digit growth. Many consumer habits formed during the COVID-19 pandemic favoring food-at-home consumption and a focus on healthier eating are proving resilient, and we continue to make significant investments to address these trends.

"To meet consumer needs in line with this market dynamic and support our leading market share positions, our brands continued to bring new omnichannel solutions to customers. As a result, Q3 net consumer online sales grew 29.2% at constant currency rates, coming on top of the very robust growth profile from Q3 2020. And at bol.com, our online retail platform in the Benelux, net consumer sales grew by 19.2% in the quarter, which comes on top of 45.6% growth in Q3 2020. Bol.com's sales from third-party sellers grew 24.6% in the quarter, with nearly 48,000 merchant partners on the platform.

"We continue to solidify our position as an industry-leading local omnichannel retailer by executing our strategy to improve supply chain, advance omnichannel offerings, and enhance omnichannel productivity. To improve the efficiency of our supply chain, the U.S. business has now achieved self-distribution for 65% of center store volume, and remains on schedule to transition to a fully self-distributed network in 2023.

"To advance omnichannel offerings, Giant Food will soon launch Ship2me, an online marketplace solution, initially offering an additional ~40,000 general merchandise and food items. During the quarter, we also added 102 new click-and-collect locations in the U.S. and our brands in Greece and the Czech Republic expanded their online grocery delivery services.

"Improving omnichannel productivity remains a high priority and we are proud of our new e-commerce fulfillment facility in the Philadelphia market at The GIANT Company, which opened this week. The facility is part of our efforts to drive growth and efficiencies in our online operations. At our Investor Day on November 15, 2021, you will hear more from us regarding these and exciting initiatives being undertaken throughout the business in support of our omnichannel ambitions.

"We also continued along our path as a consolidator of choice within the food retail industry during Q3 by successfully completing the acquisition of 38 stores from DEEN in the Netherlands. We have already remodeled the majority of the acquired stores, and expect to have all of the stores remodeled by mid-November.

"Lastly, we continue to make progress in elevating our Healthy and Sustainable strategy. Our MSCI ESG ranking has been upgraded to an ‘AA’ ranking from our previous ‘A’ ranking, putting Ahold Delhaize in the top 25% of all companies measured. The ranking reflects our efforts to reduce carbon emissions, mitigate risks, and ensure we have great diverse talent. We are proud of this achievement as it reflects our ambition to be an ESG leader, and we will continue to work hard towards this goal. Furthermore, we have joined the Science Based Targets initiative (SBTi) Business Ambition for 1.5°C, a global coalition of UN agencies, business and industry leaders, in partnership with the Race to Zero. In the Czech Republic, Albert was recognized as the market leader for its wide range of organic products. And Delhaize in Belgium has launched a new subscription service that allows companies to offer their employees a discount on healthy food products. Furthermore, bol.com has begun utilizing a multi-packing machine that saves packaging material, leading to fewer delivery trips and thereby reducing bol.com's overall CO₂ emissions.

"Looking ahead, we are excited to share more on these as well as other important initiatives and updates to our Leading Together strategy at our first virtual Investor Day on November 15, 2021."

Q3 Financial highlights

Group highlights

Group net sales were €18.5 billion, up 4.0% at actual exchange rates, and increased 4.6% at constant exchange rates. Group net sales were driven by positive contributions from comparable sales growth excluding gasoline of 1.7% and acquisitions, which were modestly offset by unfavorable foreign exchange rates.

Q3 comparable sales were negatively impacted by approximately 0.6 percentage points from unfavorable calendar shifts and weather. On a two-year comparable sales stack basis, growth for the Group of 12.2% in Q3 2021 compares to the 14.4% growth posted for the full year 2020.

In Q3, Group net consumer online sales grew 29.2% at constant exchange rates, due to significant growth at bol.com, continued strong performance across the rest of the online business, and the FreshDirect acquisition.

In Q3, Group underlying operating margin was 4.4%, down 0.2 percentage points from the prior year at constant exchange rates, as margins lapped unusually high levels from last year due to COVID-19. Margins in 2020 benefited largely from higher operating leverage due to strong sales trends related to COVID-19. In Q3, Group IFRS-reported operating margin was 4.2%.

Underlying income from continuing operations was €547 million, up 3.2% in the quarter at actual rates. Ahold Delhaize's IFRS-reported net income in the quarter was €522 million. Diluted EPS was €0.51 and diluted underlying EPS was €0.53, up 7.2% at actual currency rates compared to last year's record Q3 results. Management believes that framing 2021 diluted underlying EPS growth relative to 2019 (prior to COVID-19) provides a helpful context for investors. Therefore, compared to Q3 2019, diluted underlying EPS in the quarter was up by approximately 20%. In the quarter, 7.7 million own shares were purchased for €207 million, bringing the total amount to €695 million through Q3.

U.S. highlights

U.S. net sales increased 6.8% at constant exchange rates and 5.8% at actual exchange rates. U.S. comparable sales excluding gasoline increased 2.9%, growing on top of 12.4% growth from the year ago period, as elevated food-at-home demand remained intact.

Q3 comparable sales were negatively impacted by approximately 0.8 percentage points from an unfavorable calendar shift. On a two-year comparable sales stack basis, growth was 15.3%, similar to the 15.8% growth for the full year 2020. Brand performance continued to be led by Food Lion. 

In Q3, online sales in the segment were up 52.9% in constant currency, driven by the continued expansion of click-and-collect facilities and the FreshDirect acquisition. Excluding the FreshDirect acquisition, U.S. online sales grew 26.2% in constant currency, building on top of the significant 114.7% growth in the same quarter last year. 

Underlying operating margin in the U.S. was 4.8%, down 0.2 percentage points at constant exchange rates from the prior year period, which had benefited from unusually low shrink levels and favorable sales mix owing to a surge in demand related to COVID-19. In Q3, U.S. IFRS-reported operating margin was 4.6%.

Europe highlights

European net sales grew 1.1% at constant exchange rates and 1.3% at actual exchange rates. Europe's comparable sales excluding gasoline declined by 0.2%. Despite lapping strong comparable sales growth excluding gasoline in the year ago period of 7.5% and contending with the reopening of societies across Europe, comparable sales remained stable on the back of continued market share gains. Albert Heijn was a particular standout in the quarter, with market share results being driven by successful marketing campaigns and sales uplifts provided by the brand’s store remodeling activities. The European brands that produced good comparable sales growth excluding gasoline in the quarter were led by bol.com, and included our central and southern European operations.

Q3 comparable sales in Europe were negatively impacted by approximately 0.4 percentage points from flooding in Belgium, which occurred early in the quarter. On a two-year comparable sales stack basis for Q3 2021, growth was 7.3%, a deceleration compared to growth of 12.3% in 2020, although the Q3 2021 two-year comparable stack remains elevated relative to historic levels.

In Q3, net consumer online sales in the segment were up 20.1%, following 48.6% growth in the same period last year.

Underlying operating margin in Europe was 4.3%, flat compared with the prior year at constant exchange rates, as strong savings programs offset inflationary pressures on costs. In Q3, Europe's IFRS-reported operating margin was 4.1%.

Outlook

Our Q3 results provide management with the confidence to raise the 2021 outlook for underlying operating margin, underlying EPS growth and free cash flow.

As previously reported, COVID-19, and to a lesser extent, a 53-week calendar, significantly distorted Ahold Delhaize's 2020 financial results. Lapping these effects is impacting results in 2021, which returned to a 52-week calendar.

In 2021, the Group underlying operating margin outlook has been raised to approximately 4.4%, versus approximately 4.3% previously, reflecting the strong year-to-date margin performance. The outlook continues to reflect the effects of over €750 million in cost savings largely offsetting cost pressures related to COVID-19, and the negative impact from increased online sales penetration.

The underlying EPS guidance has been raised and is now expected to grow in the low- to mid-20s range relative to 2019, versus high-teen growth previously. Management believes that framing 2021 underlying EPS guidance relative to 2019, which was prior to COVID-19 and also on a 52-week calendar, provides a helpful context for investors.

The 2021 free cash flow outlook has also been raised to approximately €1.7 billion, compared to the previous outlook of approximately €1.6 billion. This puts the Company on track to reach €5.7 billion in cumulative free cash flow from 2019-2021 (averaging €1.9 billion annually), which exceeds the Capital Markets Day 2018 target of €5.4 billion (averaging €1.8 billion annually). Capital expenditure is expected to be around €2.2 billion, and reflects the Company's higher investments in digital and omnichannel capabilities and improvements related to recent M&A. In addition, Ahold Delhaize remains committed to its dividend policy and share buyback program in 2021, as previously stated. We expect to grow the full-year 2021 dividend year-over-year.   

1. No significant impact to underlying operating margin from returning to a 52-week calendar versus a 53-week calendar in 2020, though the return to a 52-week calendar will negatively impact net sales for the full year by 1.5-2.0%. Comparable sales growth will be presented on a comparable 52-week basis.
2. Excludes M&A.
3. Calculated as a percentage of underlying income from continuing operations.
4. Management remains committed to the share buyback and dividend program, but given the uncertainty caused by COVID-19, will continue to monitor macroeconomic developments. The program is also subject to changes in corporate activities, such as material M&A activity.

_{** Two-year comparable sales growth is a stack of the comparable sales growth excluding gasoline in the current year period added to the comparable sales growth excluding gasoline in the prior year period. This measure may be helpful to improve the understanding of trends in periods that are affected by variations in prior year growth rates.}

Zaandam, the Netherlands, August 11, 2021 – Ahold Delhaize, one of the world’s largest food retail groups and a leader in both supermarkets and e-commerce, reports second quarter results today.

Summary of key financial data

Comments from Frans Muller, President and CEO of Ahold Delhaize

"We are pleased with our Q2 performance. During the quarter, associates in all our brands and businesses continued to work tirelessly in a rapidly shifting environment, marked by the gradual reopening of the economies across our markets. We remain grateful to them for their hard work and dedication to serving customers and communities. We would also like to express our support for everyone impacted by the recent flooding in the Netherlands and Belgium and fires in Greece, and are committed to serving these communities and our brands' associates during these difficult times. We are aware of the recent increases in infection rates in many of our markets and will continue to support COVID-19 vaccination efforts in the U.S. and provide help and assistance in all our communities. We remain on track to deliver on our pledge to contribute €20 million in charitable donations, spread evenly between the U.S. and Europe, during 2021. This is part of our broader spending for COVID-19-related care, which amounted to €84 million in the quarter. In Q2, our brands, together with suppliers, remained focused on fulfilling their vital role in society by maintaining food and product supplies to local communities. 

"While communities across our markets reopened during Q2, food-at-home demand remained very resilient. Many of the habits formed by consumers during the COVID-19 pandemic in 2020 are proving sticky, aided by our initiatives to improve our omnichannel offerings for consumers. This drove Group net sales of €18.6 billion in the quarter and was exemplified by the acceleration in the Group two-year comparable sales stack in Q2 to 16.4%, versus growth of 14.4% in full year 2020. The two-year comparable sales stack growth rates were strong in both of our regions, but particularly in the U.S. 

"While COVID-19 continues to create significant uncertainty, our Q2 results provide us with the confidence to raise our underlying EPS and underlying operating margin forecast for the full year. We also announced a 2021 interim dividend of €0.43 compared to the 2020 interim dividend of €0.50, in line with our dividend policy which is equal to 40% of the year-to-date underlying income per share from continuing operations. As previously communicated, expect to grow the full-year 2021 dividend year-over-year.

"We continue to be in a strategically stronger position in 2021 relative to the time before the COVID-19 pandemic began. Our investments in our online proposition continue to serve us well. In Q2, net consumer online sales continued to grow, coming on top of the very robust growth profile from the same quarter last year. During the quarter, we added 86 new click-and-collect locations in the U.S., continued to expand AH Compact (our no-fee delivery service in the Netherlands) to new markets, and doubled Albert Heijn's home delivery coverage in Belgium's Flanders region.

"Our "Save for Our Customers" program remains on track to produce savings of more than €750 million in 2021 and we continue to execute against our initiatives aimed at becoming a more efficient company beyond 2021. For example, after a successful pilot program, the U.S. businesses will scale up the use of artificial intelligence-enabled ‘exosuits’ to reduce fatigue and improve safety for associates in distribution centers. We also remain on schedule to achieve 65% self-distribution in the U.S. supply chain by year-end and 85% by 2022.  

"We continue to make progress in elevating our Healthy and Sustainable strategy. We are proud to be one of the leading signers of the EU Code of Conduct for Responsible Food Business and Marketing Practices, as part of the European Green Deal, committed to shifting to a sustainable food system. As part of the pact, we have made commitments in the areas of healthier choices, product transparency, waste reduction and climate impact. In Europe, Romania has added the Nutri-Score nutritional navigation system to all of its own-brand ranges, joining Delhaize Belgium and our Serbian brands, which already utilize the Nutri-Score system. In the U.S., 52.4% of our Q2 sales are healthy, earning the Guiding Stars 1, 2, or 3 rating. This is in support of our company-wide ambition to raise sales of healthy own-brand products to 51% by the end of 2022; in 2020 we reached 49.8%."  

Q2 Financial highlights

Group highlights

Group net sales were €18.6 billion, down 2.4% at actual exchange rates, but up 3.0% at constant exchange rates, impacted by unfavorable foreign exchange rate, acquisitions, a rebound in gasoline sales, and flat comparable sales growth excluding gasoline, cycling strong Q2 2020 results. Comparable sales were negatively impacted by approximately 0.3 percentage points from unfavorable calendar shifts in 2021. On a two-year comparable sales stack basis, growth for the Group of 16.4% in Q2 2021 was an acceleration from the 14.4% growth posted for the full year 2020, and consistent with the 16.4% growth from Q1 2021. In Q2, Group net consumer online sales grew 35.8% at constant exchange rates, aided by the FreshDirect acquisition.

In Q2, Group underlying operating margin was 4.5%, down 0.8 percentage points from the prior year at constant exchange rates, as margins lapped unusually high levels in the prior year due to COVID-19.  Margins in 2020 benefited largely from higher operating leverage due to higher sales trends related to COVID-19. In Q2, Group IFRS-reported operating margin was 4.4%.

Underlying income from continuing operations was €551 million, down 20.6% in the quarter. Ahold Delhaize's IFRS-reported net income in the quarter was €540 million. Diluted EPS was €0.52 and diluted underlying EPS was €0.53, down 17.5% compared to last year's record Q2 results. Management believes that framing 2021 diluted underlying EPS growth relative to 2019 (prior to COVID-19) provides a helpful context for investors. Therefore, compared to Q2 2019, diluted underlying EPS in the quarter was up approximately 55%. In the quarter, 7.5 million own shares were purchased for €176 million, bringing the total amount to €488 million in the first half of the year.

U.S. highlights

U.S. net sales increased 2.7% at constant exchange rates, and declined 6.2% at actual exchange rates. U.S. comparable sales excluding gasoline declined 1.5%, as they were unfavorably impacted by the lapping of significant consumer stock-up activity related to COVID-19 in 2020, when comparable sales excluding gasoline grew 20.6% in the second quarter. On a two-year comparable sales stack basis for Q2 2021, growth was 19.1%, a sequential acceleration versus the 15.8% growth for the full year 2020. Brand performance continued to be led by Food Lion.

In Q2, online sales in the segment were up 61.0% in constant currency, driven by continued expansion of click-and-collect facilities and the FreshDirect acquisition. Excluding the FreshDirect acquisition, U.S. online sales grew 29.0% in constant currency, building on top of the significant 126.8% growth in the same quarter last year. 

Underlying operating margin in the U.S. was 5.0%, down 1.1 percentage points from the prior year at constant exchange rates, as the prior year period benefited from higher operating leverage due to higher sales trends related to COVID-19 and, to a smaller extent, continued costs related to COVID-19. In Q2, U.S. IFRS-reported operating margin was 4.9%.

Europe highlights

European net sales grew 3.6% at constant exchange rates and 3.9% at actual exchange rates. Europe's comparable sales excluding gasoline grew 2.4%, despite lapping high comparable sales excluding gas of  10.2% in the same quarter last year. Q2 comparable sales were negatively impacted by approximately 0.7 percentage points from calendar shifts in 2021. On a two-year comparable sales stack basis for Q2 2021, growth was 12.6%, an acceleration compared to growth of 12.3% in 2020. The strong growth was led by performance at Albert Heijn, bol.com and in the Czech Republic.

In Q2, net consumer online sales in the segment were up 27.0%, which comes on top of 63.9% growth in the same period last year. At bol.com, net consumer sales grew by 24.2% in the quarter, which comes on top of 65.4% growth in Q2 2020. Bol.com's sales from third-party sellers grew 26% in the quarter, with nearly 47,000 merchant partners on the platform.

Underlying operating margin in Europe was 4.2%, down 0.3 percentage points from the prior year at constant exchange rates, as the prior year period benefited from higher operating leverage due to higher sales trends related to COVID-19 and to a smaller extent, continued costs related to COVID-19. In Q2, European IFRS-reported operating margin was 4.1%.

Outlook

While COVID-19 continues to create significant uncertainty for the remainder of 2021, our results in Q2 provide management the confidence to once again raise the underlying EPS growth outlook for 2021, and to raise the underlying operating margin outlook for 2021.

As previously reported, COVID-19, and to a lesser extent, a 53-week calendar, significantly distorted Ahold Delhaize's 2020 financial results. Lapping these effects will impact results in 2021, which returns to a 52-week calendar.

In 2021, the Group underlying operating margin outlook has been raised to approximately 4.3%, versus at least 4.0% previously, reflecting the strong margin performance over the first half of the year. The outlook continues to reflect the effects of the cost savings of over €750 million largely offsetting cost pressures related to COVID-19, that are expected to continue and the negative impact from increased online sales penetration.

The underlying EPS guidance has been raised and is now expected to grow in the high-teen range relative to 2019 earnings, versus low- to mid-teen growth previously. Management believes that framing 2021 underlying EPS guidance relative to 2019, which was prior to COVID-19 and also on a 52-week calendar, provides a helpful context for investors.

The free cash flow outlook is unchanged at approximately €1.6 billion. This puts the Company on track to reach €5.6 billion in cumulative free cash flow from 2019-2021 (averaging nearly €1.9 billion annually), which exceeds the Capital Markets Day 2018 target of €5.4 billion (averaging €1.8 billion annually). Capital expenditure is expected to be around €2.2 billion, and reflects the Company's higher investments in digital and omnichannel capabilities and for improvements related to recent M&A. In addition, Ahold Delhaize remains committed to its dividend policy and share buyback program in 2021, as previously stated. We expect to grow the full-year 2021 dividend year-over-year.  

1. No significant impact to underlying operating margin from returning to a 52-week calendar versus a 53-week calendar in 2020, though the return to a 52-week calendar will negatively impact net sales for the full year by 1.5-2.0%. Comparable sales growth will be presented on a comparable 52-week basis.
2. Excludes M&A.
3. Calculated as a percentage of underlying income from continuing operations.
4. Management remains committed to the share buyback and dividend program, but given the uncertainty caused by COVID-19, they will continue to monitor macroeconomic developments. The program is also subject to changes in corporate activities, such as material M&A activity.

_{**Two-year comparable sales growth is a stack of the comparable sales growth excluding gasoline in the current year period added to the comparable sales growth excluding gasoline in the prior year period. This measure may be helpful to improve the understanding of trends in periods that are affected by variations in prior year growth rates.}

Zaandam, the Netherlands, May 12, 2021 – 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.

The interim report for the first quarter 2021 can be viewed and downloaded at www.aholddelhaize.com.

Summary of key financial data

Comments from Frans Muller, President and CEO of Ahold Delhaize

"As we pass the one-year mark of the COVID-19 pandemic, its effects continue to have an impact across our geographies. In Q1, our brands, together with our suppliers, remained focused on fulfilling their vital role in society by maintaining food and product supplies to local communities. In addition, our U.S. brands have supported vaccination efforts. I remain thankful for the efforts of associates across all our stores, distribution centers and support offices during these challenging times. Our consistent focus on safety, while at the same time providing great customer service and community support, have helped drive a strong quarter relative to our expectations. Although COVID-19 continues to impact our results, we have now entered a period where our year-over-year growth rates are affected by the lapping of difficult prior year comparisons.  

"That said, we begin 2021 in a strategically stronger position than before the COVID-19 pandemic began. We remain focused on making additional investments to meet associate, customer and community needs – including approximately €20 million pledged evenly between the U.S. and Europe for charitable donations this year, as well as continued support of health and safety measures, which remains a top priority to enable us to further strengthen our brands' positions as leading local omnichannel retailers. These investments in COVID-19-related care total approximately €150 million, more than double the €70 million incurred in the same quarter last year.

"We are pleased with the underlying Q1 performance in both the U.S. and Europe. The two-year comparable sales stack sequentially accelerated in Q1 2021 versus Q4 2020 in both the U.S. and Europe, as we've been able to retain a strong level of underlying consumer demand by continuing to adapt to the enduring consumer behavior changes, including increased working from home, preference for healthy and fresh products, and higher online demand. Our brands were well positioned to satisfy the changing needs and preferences of their customers, many of which were trends already developing prior to COVID-19. As these trends accelerated during COVID-19, our brands have evolved more quickly to adapt. Growth in our leading local omnichannel platform also sequentially accelerated, with nearly 190% net consumer online sales growth in the U.S. and nearly 80% growth in Europe in the quarter, at constant exchange rates. Underlying operating margins were strong in the context of historical levels prior to COVID-19. While COVID-19 continues to create significant uncertainty in 2021, the outstanding Q1 results provide us with the confidence to raise our underlying EPS and Group net consumer online sales growth outlook for the year.

"Investing in our business in order to solidify our position as an industry-leading local omnichannel retailer in 2021 and beyond remains a key priority. We continued to build upon several important initiatives to increase our share of the consumer wallet and improve online capabilities, including increasing our online capacity, driven in part by our recently opened U.S. click-and-collect locations; moving forward with the launch of Ship2Me in the U.S., an “endless aisle” offering of over 100,000 general merchandise and food items, in the second half of the year; and rolling out the no-fee home delivery service AH Compact to additional markets in the Netherlands. With increased capacity and strong momentum, we now expect Group net consumer online sales to grow by over 40% in 2021 versus 30% previously. This includes the raised expectations for over 70% growth in U.S. online sales, versus over 60% growth previously, and at least €5.5 billion in net consumer online sales at bol.com, versus at least €5 billion previously.

"We also continue to make progress in elevating our Health and Sustainability strategy, and recently announced a new goal for all of our brands to achieve net-zero carbon emissions by 2050. In March, Albert Heijn was voted by consumers as the Netherlands' most sustainable supermarket chain in the Sustainable Brand Index 2021 ranking for the fifth consecutive year. The GIANT Company in the U.S. announced a new partnership with the Rodale Institute in February to develop solutions for the regenerative organic agriculture movement. We also successfully priced our inaugural sustainability-linked bond in March, amounting to €600 million with a term of nine years, linked to achieving targets in reducing food waste and scope 1 and 2 carbon emissions by 2025."

Q1 Financial highlights

Group highlights

Group net sales were €18.3 billion, up 0.3% at actual exchange rates and up 5.8% at constant exchange rates, driven largely by 4.2% comparable sales growth excluding gasoline. Group comparable sales were positively impacted in part by demand related to COVID-19, particularly within Europe. To a lesser extent, comparable sales benefited by approximately 1.3 percentage points from favorable calendar shifts and a weather impact in 2021. On a two-year comparable sales stack basis, growth for the group sequentially accelerated to 16.4% in Q1 2021 versus 13.7% in Q4 2020. Group net consumer online sales grew 103.3% in Q1 at constant exchange rates, aided by the FreshDirect acquisition, which closed on January 5.

Group underlying operating margin in Q1 was 4.6%, down 0.6 percentage points from the prior year at constant exchange rates, as margins lapped unusually high levels in the prior year due to COVID-19. Margins in 2020 benefited largely from the timing of unexpectedly higher sales that preceded the timing of significant costs related to COVID-19 in the U.S., an effect which did not recur this year. The group underlying operating margin in Q1 was therefore negatively impacted by COVID-19-related costs of approximately €150 million. Group IFRS-reported operating margin was 4.5% in Q1.

Underlying income from continuing operations was €566 million, down 11.9% in the quarter. Ahold Delhaize's IFRS-reported net income in the quarter was €550 million. Diluted EPS was €0.53 and diluted underlying EPS was €0.54, down (8.4)% compared to last year's record Q1 results. Management believes that framing 2021 diluted underlying EPS growth relative to 2019 (prior to COVID-19) provides a helpful context for investors. Therefore, compared to Q1 2019, diluted underlying EPS in the quarter was up approximately 38%. In the quarter, 13.6 million own shares were purchased for €312 million.

U.S. highlights

U.S. comparable sales excluding gasoline grew 1.7%, positively impacted by demand related to COVID-19, particularly in January and February. To a lesser extent, comparable sales were also favorably impacted by approximately 1.7 percentage points from calendar shifts and a weather impact. This was offset, in part, by a decline in March's comparable sales, which were unfavorably impacted by the lapping of significant consumer stock-up activity related to COVID-19 in 2020, when comparable sales excluding gasoline grew 33.8%. On a two-year comparable sales stack basis for Q1 2021, growth was 15.5%, a sequential acceleration versus the 13.5% growth in Q4 2020. Brand performance was led by Food Lion. 

Online sales in the segment were up 188.3% in constant currency, driven in part by the aforementioned FreshDirect acquisition. Excluding the FreshDirect acquisition, the U.S. online sales growth rate in Q1 2021 sequentially accelerated to 135.2% growth versus the 128.5% growth Q4 2020. 

Underlying operating margin in the U.S. was 4.8%, down 1.8 percentage points from the prior year at constant exchange rates, as margins lapped unusually high levels in the prior year due to COVID-19. Margins in 2020 benefited largely from the timing of unexpectedly higher sales that preceded the timing of significant costs related to COVID-19, an effect which did not recur in Q1 2021.

Europe highlights

Europe's comparable sales excluding gasoline grew 8.3%, positively impacted by demand related to COVID-19, particularly in January and February. To a lesser extent, Q1 comparable sales were favorably impacted by approximately 0.5 percentage points from calendar shifts in 2021. Comparable sales remained positive in March despite the lapping of significant consumer stock-up activity related to COVID-19 in 2020, when comparable sales excluding gasoline grew 15.9%. On a two-year comparable sales stack basis for Q1 2021, growth was 18.1%, a sequential acceleration versus the 13.9% growth in Q4 2020. The strong growth was led by the brands in the Benelux and Czech Republic.

Net consumer online sales in the segment were up 78.6% in Q1 2021, a sequential acceleration versus the 73.4% growth in Q4 2020. At bol.com, the online retail platform in the Benelux included within the Europe segment's results, net consumer sales grew by 76.6%, a sequential acceleration versus the 69.6% growth in Q4 2020. Bol.com's sales from third-party sellers grew 101% in the quarter, with nearly 45,000 merchant partners on the platform.

Underlying operating margin in Europe was 4.7%, up 0.6 percentage points from the prior year at constant exchange rates. Margin expansion was driven by operating leverage from strong sales growth as a result of COVID-19.

Outlook

While COVID-19 continues to create significant uncertainty for the remainder of 2021, the strong Q1 results provide management the confidence to raise the underlying EPS growth outlook for the year.

As a reminder, COVID-19, and to a lesser extent, a 53-week calendar, significantly distorted Ahold Delhaize's 2020 financial results. Lapping these effects will impact results in 2021, which returns to a 52-week calendar.

In 2021, the underlying operating margin outlook of at least 4% is unchanged. This outlook reflects a balanced approach, with cost savings of over €750 million largely offsetting cost pressures related to COVID-19, that are expected to continue (albeit at a lower level than 2020), and the impact from increased online sales penetration.

The underlying EPS guidance was raised and now expected to grow in the low- to mid-teen range relative to 2019 versus mid- to high-single-digit growth previously. Management believes that framing 2021 underlying EPS guidance relative to 2019, which was prior to COVID-19 and also on a 52-week calendar, provides a helpful context for investors.

The free cash flow outlook is unchanged at approximately €1.6 billion. This puts the Company on track to reach €5.6 billion in cumulative free cash flow from 2019-2021 (averaging nearly €1.9 billion annually), which exceeds the Capital Markets Day 2018 target of €5.4 billion (averaging €1.8 billion annually). Capital expenditure is expected to be around €2.2 billion, and reflects the Company's higher investments in digital and omnichannel capabilities and for improvements related to recent M&A. In addition, Ahold Delhaize remains committed to its dividend policy and share buyback program in 2021, as previously stated. 

1. No significant impact to underlying operating margin from returning to a 52-week calendar versus a 53-week calendar in 2020, though the return to a 52-week calendar will negatively impact net sales for the full year by 1.5-2.0%. Comparable sales growth will be presented on a comparable 52-week basis.
2. Excludes M&A.
3. Calculated as a percentage of underlying income from continuing operations.
4. Management remains committed to the share buyback and dividend program, but given the uncertainty caused by COVID-19, they will continue to monitor macroeconomic developments. The program is also subject to changes in corporate activities, such as material M&A activity.

• In 2020, the Ahold Delhaize brands focused on fulfilling their vital role in society and meeting the challenges of COVID-19 by contributing €680 million to support customers, associates, and communities with COVID-19 relief care; brands also committed to contribute €1.4 billion to improve the security of associates' pension benefits.
• Associates across all the brands of Ahold Delhaize worked diligently to successfully maintain food and product supplies to local communities, to implement measures to keep customers and their colleagues safe, to care for their local communities, and to drive substantial progress in ESG initiatives in 2020; their efforts have helped Ahold Delhaize and its local brands solidify their positions as industry-leading local omnichannel retailers in each of their markets in 2021 and beyond.
• Net sales were €19.6 billion, up 18.0% in Q4 and up 14.2% in 2020 at constant exchange rates.
• In the U.S. and Europe, comparable sales excluding gas grew 11.2% and 10.6% in Q4, respectively, and were up 14.4% and 9.6% in 2020, respectively.
• Net consumer online sales grew 84.2% in Q4 and 67.4% in 2020 at constant exchange rates, including U.S. growth of 128.5% in Q4 and 105.1% in 2020.
• Underlying operating margin was 4.1% in Q4 and 4.8% in 2020; diluted underlying EPS was €0.53 in Q4 and €2.26 in 2020.
• IFRS-reported operating margin was 0.1% in Q4 and 2.9% in 2020, impacted by the U.S. pension plan withdrawals; as such, diluted EPS was €(0.01) in Q4 and €1.30 in 2020.
• 2020 free cash flow was €2.2 billion compared to guidance of at least €1.7 billion, despite a total of €609 million related to pension plan withdrawals and incremental pension funding payments, and net capital expenditures of €2.6 billion.
• 2021 outlook: Group net consumer online sales to grow over 30%; underlying operating margin to be at least 4%; underlying EPS to grow by mid- to high-single digits versus 2019; free cash flow to be approximately       €1.6 billion, resulting in €5.6 billion in cumulative free cash flow from 2019-2021, which exceeds the Capital Markets Day 2018 target of €5.4 billion.

Zaandam, the Netherlands, February 17, 2021 – Ahold Delhaize, one of the world’s largest food retail groups and a leader in both supermarkets and e-commerce, reports fourth quarter results today.

Summary of key financial data 

1. For comparable information on a pro forma 13/52-week basis, refer to section Pro forma information: financial data on a 13/52-week basis in this press release.
2. Not meaningful, as operating income in the U.S. was a loss and diluted underlying EPS was negative in Q4 2020.

Comments from Frans Muller, President and CEO of Ahold Delhaize

"In 2020, the effects of COVID-19 and social unrest deeply impacted the communities we serve, and created unprecedented challenges for the Ahold Delhaize brands. Despite these challenges, the hundreds of thousands of associates across all our brands, distribution centers, and support offices demonstrated courage and care in protecting the safety of our stores and distribution centers, while providing great customer service and community support. I would like to once again thank each and every one of them for their tremendous efforts in 2020.

"To support the efforts of associates across our brands and businesses, we made significant investments in additional safety measures, enhanced associate pay and benefits, and substantial charitable donations, which resulted in approximately €210 million in COVID-19-related costs in the fourth quarter, and a total of approximately €680 million in 2020. We also committed to contribute over €1.4 billion to improve the security of pension benefits for associates and reduce financial risk for Giant Food and Stop & Shop. In addition, we shifted capital expenditure spending in 2020 to accelerate investments in digital and omnichannel capabilities. As a result of these combined efforts, we believe we ended 2020 in a strategically stronger position than before the COVID-19 pandemic began. We remain focused on making additional investments, as needed, to meet associate, customer and community needs – including continued support of health and safety, which remains a top priority to enable us to further strengthen our brands' positions as leading local omnichannel retailers, now and in the future.

"We are pleased with the underlying Q4 performance in both the U.S. and Europe. Our leading local omnichannel platform generated nearly 130% net consumer online sales growth in the U.S. and nearly 75% growth in Europe in the quarter, at constant exchanges rates. This strong Q4 performance allowed us to exceed our underlying EPS outlook and produce €2.2 billion in free cash flow in 2020, despite significant payments to withdraw or improve the security of pension plans in the U.S. and the Netherlands, and our accelerated investments in digital and omnichannel capabilities.

"Last quarter, we outlined plans to invest in our business to solidify our position as an industry-leading local omnichannel retailer in 2021 and beyond in order to increase our share of the consumer wallet, and find ways to improve our online productivity. Since then, we continued to bring to life, and build upon, several important initiatives, including significantly increasing our online capacity, driven in part by opening over 1,130 U.S. click-and-collect locations to date; launching the GIANT Company Choice Pass on January 19th, which offers unlimited free grocery delivery and pickup with an annual membership fee of $98; and rolling out the no-fee home delivery service AH Compact to additional markets in the Netherlands. We are also exceeding the key multi-year financial targets we outlined at our 2018 Capital Markets Day. As a result, we feel increasingly confident about our prospects in 2021 and beyond, and are now setting more ambitious targets in several key areas of our business, which include:

• Group net consumer online sales grew to €7.6 billion in 2020, exceeding our target of €7 billion one year early. This includes bol.com net consumer online sales of €4.3 billion in 2020, which surpassed our target of €3.5 billion, also one year early. With increased capacity and continued momentum, we now expect Group net consumer online sales to grow over 30% in 2021, which includes over 60% growth in U.S. online sales and achieving a new target of at least €5 billion in net consumer online sales at bol.com.
  
   
• Improving online productivity across all of our brands is one of our highest priorities for 2021 and beyond. We will accelerate U.S. online grocery fulfillment productivity growth through end-to-end improvement of processes, systems, operating practices and innovation, beginning in 2021 and continuing through the end of 2022, which should result in a lower cost to serve. To improve efficiency even further, we will open an additional micro-fulfillment center with Autostore/Swisslog inside of a new omnichannel fulfillment center in Philadelphia in Q4 2021. In both the U.S. and Europe, we will utilize technology to improve route optimization in order to reduce last-mile costs. At bol.com, we are pleased with the team's ability to drive positive operating profits and double-digit return on capital in 2020, and we expect this to continue in 2021.
• We are raising our cumulative cost savings target for 2019-2021 to €2.3 billion, up from our previous target of €1.9 billion. We achieved €844 million in cost savings in 2020 and expect to achieve at least €750 million in additional cost savings in 2021, which is above our previous annual targets of €600 million for both years. These cost savings efforts will enable our brands to invest in providing more value and convenience to customers, and help us mitigate cost pressures in the business, which we expect will lead to a solid Group underlying operating margin profile in 2021, which is expected to be at least 4%.

"Importantly, for the benefit of all our stakeholders, we aim to strike the appropriate balance between investing in the health and safety of associates and customers, supporting our local communities, prioritizing environmental, social, and governance (ESG) initiatives, and returning capital to shareholders. We therefore propose a cash dividend of €0.90 for the financial year 2020, an increase of 18.4% compared to 2019, reflecting our ambition to sustainably grow our dividend per share. This represents a payout ratio of 40%, based on the expected dividend payment on underlying income from continuing operations on a comparable 52-week period." 

Continued progress on initiatives to solidify position as industry-leading local omnichannel retailer in 2021+

Ahold Delhaize will continue to solidify its position as industry-leading local omnichannel retailer in 2021 and beyond, concentrating on (1) significantly stepping up online capacity, supply chain and technological capabilities; (2) advancing omnichannel offerings to customers; and (3) addressing the call to action in ESG. We would like to highlight the following initiatives, which add to and build upon many of the initiatives announced in Q3 2020:

Q4 Financial highlights

Group net sales were €19.6 billion, up 12.8%, or 18.0% at constant exchange rates, driven largely by 11.0% comparable sales growth excluding gasoline. Group comparable sales were positively impacted by demand related to COVID-19. Group net consumer online sales grew 84.2% in Q4 at constant exchange rates. Group underlying operating margin in Q4 was 4.1%, down 0.3 percentage points from the prior year at constant exchange rates. Underlying operating margin was impacted by significant costs related to COVID-19, which amounted to approximately €210 million in Q4, a planned pension expense increase in the Netherlands, transition expenses related to the U.S. supply chain transformation initiative, and other one-time items in the U.S. These impacts were partly offset by a margin benefit of 0.2 percentage points from the calendar effect of a 14-week quarter, compared to 13-week quarter in 2019. Group IFRS-reported operating margin was 0.1% in Q4, impacted by the U.S. multi-employer pension plan withdrawal and settlement agreements.

U.S. comparable store sales excluding gasoline grew 11.2%, due largely to the COVID-19 outbreak. Brand performance was strong across the board. Online sales in the segment were up 128.5% in constant currency. Underlying operating margin in the U.S. was 3.9%, down 0.4 percentage points from the prior year at constant exchange rates, impacted by significant costs related to COVID-19. One-time items and the previously announced transition expenses related to the U.S. supply chain transformation initiative also unfavorably impacted margins by 0.5 percentage points. These impacts were partly offset by a margin benefit of 0.4 percentage points from the calendar effect of a 14-week quarter, compared to 13-week quarter in 2019.

Europe's comparable sales excluding gasoline grew 10.6%, positively impacted by demand related to COVID-19. Net consumer online sales in the segment were up 73.4%. Underlying operating margin in Europe was 5.1%, up 0.1 percentage points from the prior year at constant exchange rates. Operating leverage from higher sales growth was offset in part by higher costs related to COVID-19 as well as        €11 million of pension expense in the Netherlands during the quarter. There was a margin benefit of 0.1 percentage points from the calendar effect of a 14-week quarter, compared to a 13-week quarter in 2019.

At bol.com, the online retail platform in the Benelux included within the Europe segment's results, net consumer sales grew by 69.6%. Bol.com's sales from third-party sellers grew 110% in the quarter, with over 41,000 merchant partners on the platform.

Underlying income from continuing operations was €561 million, down 1.0% in the quarter. Ahold Delhaize's net loss was €9 million, down in the quarter due primarily to previously announced provisions for U.S. multi-employer pension plan withdrawal and settlement agreements, which amounted to €841 million. Diluted EPS was €(0.01) and diluted underlying EPS was €0.53, up 2.8%. In the quarter, 12.3 million shares were purchased for €296 million, bringing the total amount to €1,001 million in 2020.

Outlook

COVID-19 continues to create significant uncertainty in 2021. In addition, COVID-19, and to a smaller extent, a 53-week calendar, significantly distorted Ahold Delhaize's 2020 financial results. Lapping these effects will impact 2021 results, which returns to a 52-week calendar.

In 2021, underlying operating margin is expected to be at least 4%. This outlook reflects a balanced approach with cost savings largely offsetting cost pressures. As there continues to be significant uncertainty due to COVID-19, a more specific range is not provided.

Underlying EPS is expected to grow by mid- to high-single digits relative to 2019. Management believes that framing 2021 underlying EPS guidance relative to 2019, which was prior to COVID-19 and also on a 52-week calendar, provides a helpful context.

Free cash flow is expected to be approximately €1.6 billion. This puts the Company on track to reach €5.6 billion in cumulative free cash flow from 2019-2021 (averaging nearly €1.9 billion annually), which exceeds the Capital Markets Day 2018 target of €5.4 billion (averaging €1.8 billion annually). Capital expenditure is expected to be around €2.2 billion, and reflects the Company's accelerated investments in digital and omnichannel capabilities and investments needed to improve recent M&A operations and capabilities. In addition, Ahold Delhaize remains committed to its dividend policy and share buyback program in 2021, as previously stated. 

1. No significant impact to underlying operating margin from returning to a 52-week calendar versus a 53-week calendar in 2020, though the return to a 52-week calendar will negatively impact net sales for the full year by 1.5-2.0%. Comparable sales growth will be presented on a comparable 52-week basis. The margin includes a dilution of $50 million in transition expenses from the U.S. supply chain initiative.
2. Excludes M&A.
3. Calculated as a percentage of underlying income from continuing operations.
4. Management remains committed to the share buyback and dividend program, but given the uncertainty caused by COVID-19, they will continue to monitor macroeconomic developments. The program is also subject to changes in corporate activities, such as material M&A activity.

Pro forma information: financial data on a 13/52-week basis

Considering that the financial year consisted of 53 weeks in 2020, compared with 52 weeks in 2019, with the last quarter of 2020 having 14 weeks, compared to 13 weeks in 2019, Ahold Delhaize has prepared pro forma information in order to provide a comparable base for the results. The pro forma information presented below is intended to provide comparable information on a 13-week basis for the fourth quarter and 52-week basis for the full year of 2020 versus 2019.

This pro forma information represents an estimate of the results related to a 13-week period for Q4 2020 and a 52-week period for the full-year 2020, and is calculated by deducting the estimated results related to the 53rd week of 2020 from the reported results for the fourth quarter and the full-year 2020, as presented in the other sections of this press release.

• EPS of €0.50 with underlying EPS of €0.52 in Q4; underlying EPS up 17.1% in Q4 and 8.4% in 2019
• Net sales were €17.4 billion, up 3.1% in Q4 and up 2.3% in 2019 at constant exchange rates
• Net consumer online sales grew 30.1% in Q4 and 28.6% in 2019 at constant exchange rates
• Operating income was €749 million in Q4 and €2.7 billion in 2019
• Underlying operating margin was 4.4% in Q4 and 4.2% in 2019
• S. comp sales growth excl. gas accelerated to +2.3%, with online sales growth of 42.7%* in Q4
• 2019 free cash flow was €1.8 billion, in line with our guidance outlook

* at constant exchange rates

Zaandam, the Netherlands, February 12, 2020 – Ahold Delhaize, one of the world’s largest food retail groups and a leader in both supermarkets and eCommerce, reports fourth quarter results today.

Frans Muller, President and CEO of Ahold Delhaize, said: "We ended the year on a high note, with strong group performance in the fourth quarter. We exceeded our full-year 2019 guidance outlook for underlying earnings per share and met our free cash flow guidance. We posted 17.1% growth in underlying earnings per share from continuing operations in the fourth quarter, resulting in an increase of 8.4% for the full year, above our full-year guidance of low-single-digit growth. We also generated €1.8 billion in free cash flow in 2019, achieving our guidance outlook, despite significantly stepping up capital investments in order to drive long-term growth in our business.

"In the U.S., comparable sales growth excluding gasoline accelerated to 2.3% during the quarter, and was 2.6% excluding the net impact from a weather benefit last year. We were encouraged to see the two-year stacked comparable sales growth, adjusted for weather, also accelerated to 5.0% in the fourth quarter versus 4.5% in the third quarter of 2019. Our online sales growth in the U.S. accelerated to 42.7% at constant exchange rates in the fourth quarter, and we met our 2019 guidance outlook of over 20% growth, building upon our position as the leading omnichannel operator on the East Coast. Performance at Food Lion and Hannaford was particularly strong. While Stop & Shop's comparable sales excluding gasoline improved over the last quarter, they remained slightly negative due to a challenging sales environment. That said, our ‘Re-imagine Stop & Shop’ program continues to build momentum with sales in Long Island, and now Hartford, performing in line with our expectations. In 2020, we expect to remodel another 65 Stop & Shop stores across the brand’s footprint.

"In the Netherlands, we saw strong comparable sales growth of 4.3% during the quarter. Market share at Albert Heijn was up significantly year over year in the fourth quarter, an improving trend over previous quarters. Net consumer online sales for the segment were up 27.5%. At bol.com, our online retail platform in the Benelux, net consumer sales grew by 28.7%. In Belgium, comparable sales excluding calendar impacts were up modestly, and we gained market share during the quarter. Our Central and Southeastern Europe segment saw 3.6% comparable sales growth excluding gasoline.

"We continue to make progress on the execution of our Leading Together strategy. We exceeded our guidance for our Save for Our Customers program in 2019, generating €709 million in savings compared to our guidance of €600 million. As a result, we have raised our goal to €1.9 billion in cumulative savings through 2021, compared to our previous target of €1.8 billion. We remain on track to reach our goal of doubling net consumer online sales to €7 billion by 2021. As detailed in a separate press release, we have decided to discontinue our small U.S. Midwest online grocery sales operation, though we remain committed to extending our leading position in the larger East Coast omnichannel operation. We expect U.S. online sales growth to accelerate to 30% or more in 2020, with a total of nearly 1,000 click-and-collect points by the end of 2020, up from 692 in 2019.

“Although we will make significant investments in 2020 to drive long-term growth, we expect group underlying operating margin in 2020 to be broadly in line with 2019. We expect mid-single-digit growth in underlying EPS in 2020.”

• Net sales were €17.8 billion, up 6.8%, or 10.1% at constant exchange rates
• In the U.S. and Europe, comp sales growth excluding gas was up 12.4% and 7.5%, respectively
• Net consumer online sales grew 62.6% at constant exchange rates; including 114.7% growth in the U.S.
• COVID-19-related costs were approximately €470 million year to date, and approximately €140 million in Q3, including safety measures and enhanced associate pay
• Underlying operating margin was 4.6%, up 0.2% points from the prior year at constant exchange rates
• IFRS reported operating income was €207 million, impacted by the previously announced €577 million provision for a U.S. pension plan withdrawal
• Diluted underlying EPS was €0.50, increasing 12.3%; diluted EPS was €0.06, unfavorably impacted by the provision for a U.S. pension plan withdrawal
• 2020 underlying EPS outlook raised to growth in the high-20% range; continue to expect free cash flow to be at least €1.7 billion, net of Q4 payment for a U.S. pension plan withdrawal, and capital expenditures of around €2.5 billion
• Announcing a new €1 billion share buyback program to start at the beginning of 2021
   

Zaandam, the Netherlands, November 4, 2020 – Ahold Delhaize, one of the world’s largest food retail groups and a leader in both supermarkets and e-commerce, reports third quarter results today.

Summary of key financial data

 Comments from Frans Muller, President and CEO of Ahold Delhaize

"As COVID-19 continues to impact our communities, I am increasingly proud of our teams' performance. Their intense focus on the safety of our stores and distribution centers and their persistent efforts to provide outstanding service to our local communities are commendable. In Q3, we sustained important investments in additional safety measures, enhanced associate pay and benefits, and significant charitable donations, which resulted in approximately €140 million in COVID-19-related costs in the quarter, and €470 million year to date.

"The operational execution by our teams remains outstanding and has continued to drive strong Q3 performance in both the U.S. and Europe. Our results reflected our ability to leverage our leading local digital and omnichannel platform, which generated nearly 115% net consumer online sales growth in the U.S. and nearly 50% growth in Europe in the quarter, at constant exchanges rates. While there remains a high level of uncertainty in the market, our strong year-to-date performance allows us to raise our 2020 underlying EPS outlook once again.

"We continue to adapt to changes we are seeing in consumer shopping patterns and behavior. Over the coming years, we will invest in our business to solidify our position as an industry-leading local omnichannel retailer and increase our share of the consumer wallet. We will find ways to improve our online productivity and are on track to achieve the €1.9 billion cumulative cost savings target by 2021. To benefit all of our stakeholders, we aim to strike the appropriate balance between investing in the health and safety of associates and customers, supporting our local communities, prioritizing environmental, social, and governance (ESG) initiatives, and returning capital to shareholders.

"We therefore remain committed to our policy for a 40-50% dividend payout ratio and are today announcing a new €1 billion share repurchase authorization for 2021, which is a testament to the strength we continue to see in our business model."

Solidifying position as industry-leading local omnichannel retailer in 2021+

Ahold Delhaize will continue to solidify its position as industry-leading local omnichannel retailer in 2021 and beyond, concentrating on the following three areas:

 

Q3 Financial highlights

Group net sales were €17.8 billion, up 6.8%, or 10.1% at constant exchange rates, driven largely by 10.5% comparable sales growth excluding gasoline. Group comparable sales were mainly driven by demand related to COVID-19. Group net consumer online sales grew 62.6% in Q3 at constant exchange rates. Group underlying operating margin in Q3 was 4.6%, up 0.2 percentage points from the prior year at constant exchange rates, benefiting largely from higher operating leverage due to higher sales trends related to COVID-19. This was offset in part by significant costs related to COVID-19, which amounted to approximately €140 million in Q3.

U.S. comparable store sales excluding gasoline grew 12.4%, due largely to the COVID-19 outbreak. Brand performance was strong across the board, led by growth at Food Lion and Giant Food. Online sales in the segment were up 114.7% in constant currency. U.S. underlying operating margin was 5.0%, up 0.6 percentage points from the prior year at constant exchange rates, driven largely by operating leverage from higher sales growth due to COVID-19, offset in part by significant costs related to COVID-19.

Europe's comparable sales excluding gasoline grew 7.5%, due largely to demand related to COVID-19. Net consumer online sales in the segment were up 48.6%. Underlying operating margin in Europe was 4.3%, down 0.5 percentage points from the prior year at constant exchange rates. Operating leverage from higher sales growth was largely offset by higher costs related to COVID-19 as well as €11 million of pension expense in the Netherlands during the quarter and the lapping of one-time items that benefited margins in the Netherlands in the prior year's quarter. Excluding these impacts, underlying operating margin in Europe would have been unchanged versus the prior year.

At bol.com, the online retail platform in the Benelux included within the Europe segment's results, net consumer sales grew by 45.6%. Bol.com's sales from third-party sellers grew 73% in the quarter, with nearly 37,000 merchant partners on the platform.

Ahold Delhaize's net income was €68 million, down 84.9% in the quarter due primarily to a previously announced €577 million provision for a U.S. pension plan withdrawal. Underlying income from continuing operations was €530 million, up 8.6% in the quarter. Diluted EPS was €0.06, down 84.4%, and diluted underlying EPS was €0.50, up 12.3%. Nearly 7.5 million shares were purchased in the quarter for €186 million, bringing the total amount to €705 million in the first three quarters of the year.

Outlook

COVID-19 continues to create significant uncertainty for the remainder of 2020, though, due to the Company's strong performance so far this year, guidance for underlying EPS is being raised to the high-20% range from low-to-mid-20% growth previously. The group will reach its €7 billion net consumer online sales goal in 2020, one year ahead of plan.

Underlying operating margin in 2020 is still expected to be higher than 2019. 

The 2020 free cash flow outlook of at least €1.7 billion is reiterated and includes the effect of paying the majority of the previously announced €577 million pre-tax obligation to withdraw from the UFCW International Union – Industry Pension Fund in Q4. The capital expenditure guidance of around €2.5 billion is maintained and reflects the Company's accelerated investments in digital and omnichannel capabilities. In addition, Ahold Delhaize remains committed to its dividend policy and share buyback program in 2020, as previously stated. A new €1 billion share buyback program has been authorized, to start at the beginning of 2021.

1. No significant impact to underlying operating margin from the 53rd week, though the 53rd week should benefit net sales for the full year by 1.5-2.0%. Comparable sales growth will be presented on a comparable 53-week basis. As previously communicated, the margin includes a dilution of €45 million in transition expenses from the U.S. supply chain initiative, and an increased non-cash service charge of €45 million for the Netherlands employee pension plan, resulting from lower discount rates in the Netherlands.
2. Excludes M&A
3. Calculated as a percentage of underlying income from continuing operations
4. Management remains committed to the share buyback program, but given the uncertainty caused by COVID-19, they will continue to monitor macroeconomic developments. The program is also subject to changes in corporate activities, such as material M&A activity.