For further information: 

• EGM 2026 materials on our website
• Press release: ‘Ahold Delhaize announces Thierry Garnier as nominee for Chief Executive Officer and member of the Management Board; Frans Muller to retire from the company in 2027’
• Press release: ‘Ahold Delhaize announces nomination of Claire Peters as CEO of Ahold Delhaize USA’
• Press release: ‘Ahold Delhaize announces nomination of Margaret Versteden-van Duijn as CEO of Ahold Delhaize Europe & Indonesia’
• Press release: ‘Ahold Delhaize announces the nomination of a new member to its Supervisory Board’ 

Protecting our infrastructure in the best interest of our customers, associates and partners is a top priority. We apologize for any inconvenience this issue may have caused customers and partners.

The Supervisory Board recommends reappointing Jolanda for a four-year term, recognizing her strong and successful leadership in delivering the company’s Growing Together strategy and strengthening organizational performance.

The Supervisory Board recommends Jolanda’s reappointment one year in advance of the end of her current appointment term, to reinforce leadership continuity and maintain a balanced (re)appointment cycle of the Management Board. Advancing the timing promotes stable and effective governance.

Wiebe Draijer, Chair of the Ahold Delhaize Supervisory Board, stated: “We are delighted to recommend Jolanda’s reappointment a year ahead of the conclusion of her current term. As CFO, she has consistently demonstrated strong financial leadership in support of Ahold Delhaize’s strategic goals, she has built strong teams within the Finance function, while keeping customers and associates top of mind.”

Upon the announcement, Jolanda added: “It is a privilege to serve as CFO of this great company, working alongside our colleagues across brands and support functions to deliver healthier, affordable food to our customers every day, while building a strong platform for continued growth and sustainable, long-term value creation. I look forward to continuing on this journey for a second term.”

Jolanda was appointed CFO and member of the Management Board at an Extraordinary General Meeting in 2023. She also serves on the board of Pon Holdings.

More information can be found in the convocation and explanatory notes of Ahold Delhaize’s 2026 AGM, which will be published on February 25, 2026.

Maintaining a balanced approach between funding growth in key strategic areas and returning excess liquidity to shareholders is part of Ahold Delhaize’s financial framework to support its Growing Together strategy. The purpose of the program is to reduce the capital of Ahold Delhaize, by cancelling all or part of the common shares acquired through the program.

The program will be executed within the limits of relevant laws and regulations, the existing authority granted at Ahold Delhaize’s 2025 annual general meeting of shareholders on April 9, 2025 and the authority (if granted) by the annual general meeting on April 8, 2026. At the current share price, the program represents approximately 28.8 million shares, or 3.2% of total shares outstanding.

The share buyback program is executed in one or several tranches. For each of them, an intermediary is mandated to execute the purchase of the shares at its own discretion during open and closed periods in compliance with the Market Abuse Regulation (“MAR”) and within pre-defined execution parameters. Shares are bought in the market and accumulated on the treasury share account until cancellation. Pursuant to the relevant statutory provisions, cancellation may not be effected earlier than two months after a resolution to cancel shares is adopted and publicly announced. Ahold Delhaize is committed to the share buyback program, but the program is subject to changes in corporate activities, such as but not limited to material M&A activity.

Ahold Delhaize will provide regular updates on the progress of the program by means of press releases.

During the EGM, Wiebe said: “I am honored to join Ahold Delhaize as Chair designate of the Supervisory Board. I look forward to working closely with the Supervisory Board, Frans Muller, and his leadership team to support them in delivering on the Growing Together strategy and realizing the company’s ambitions. Furthermore, Ahold Delhaize plays an important role in shaping a more healthy and sustainable food system - an area I am passionate about. I am excited to help the company further strengthen its position as a key player in food retail.” 

Peter joined the Ahold Delhaize Supervisory Board in April 2019 and has served as Chair since January 1, 2021. "It has been an honor to serve as Chair of Ahold Delhaize's Supervisory Board. I am confident that we have found an excellent successor, and the company is well positioned to move into the next phase of its strategic journey," said Peter. Peter will step down from the Supervisory Board per October 1, 2025. 

For further information:

• EGM 2025 materials on our website
• Press release ‘Ahold Delhaize announces that its Supervisory Board has decided to nominate Wiebe Draijer for appointment as new Supervisory Board Member and Chair designate; publishes convocation of EGM’

Maintaining a balanced approach between funding growth in key channels and returning excess liquidity to shareholders is part of Ahold Delhaize’s financial framework to support its Growing Together strategy. The purpose of the program is to reduce the capital of Ahold Delhaize, by cancelling all or part of the common shares acquired through the program.

The program will be executed within the limits of relevant laws and regulations, the existing authority granted at Ahold Delhaize’s 2024 annual general meeting of shareholders on April 10, 2024 and the authority (if granted) by the annual general meeting on April 9, 2025. At the current share price, the program represents approximately 31.9 million shares, or 3.5% of total shares outstanding.

The share buyback program is executed in one or several tranches. For each of them, an intermediary is mandated to execute the purchase of the shares at its own discretion during open and closed periods in compliance with the Market Abuse Regulation (“MAR”) and within pre-defined execution parameters. Shares are bought in the market and accumulated on the treasury share account until cancellation. Pursuant to the relevant statutory provisions, cancellation may not be effected earlier than two months after a resolution to cancel shares is adopted and publicly announced. Ahold Delhaize is committed to the share buyback program, but the program is subject to changes in corporate activities, such as but not limited to material M&A activity.

Ahold Delhaize will provide regular updates on the progress of the program by means of press releases.

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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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

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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

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

Jolanda will join Ahold Delhaize mid-August as Executive Vice President Finance and member of the Executive Committee and start as CFO on 1 October after an induction period. She joins from offshore construction company Van Oord, where she has held the position of CFO since 2016. During the EGM, Jolanda Poots-Bijl said: “I will dedicate my 20 years of CFO experience in various industries, my passion, time and high level of energy to the company and its strategy, with a keen eye on people, sustainability and innovation.”
 

Frans Muller, CEO of Ahold Delhaize said: “We are looking forward to Jolanda starting. Her extensive experience as a finance leader and passion for digital transformation and sustainability will be of important value to our company.”
 

Jolanda Poots-Bijl will succeed Natalie Knight, who has been CFO and member of the Management Board since April 2020. Natalie will move back to the United States together with her family after more than 25 years in Europe.
 

“On behalf of all Ahold Delhaize associates and our Management Board, I want to thank Natalie for her contribution and positive impact on our company. We wish Natalie all the best for her future endeavors,” said Frans Muller.
 

Webcast

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.
    

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Peter Agnefjӓll has been a member of the Supervisory Board since April 2019 and was appointed Chair as per 1 January 2021. He is a member of the Governance and Nomination Committee and of the Remuneration Committee. His reappointment to the Supervisory Board for another four year term is subject to shareholder approval. 

Helen Weir, Chair of the Governance and Nomination Committee, said: “Peter has been an inspiring leader for our Supervisory Board since 2021 and he has built a strong and diverse Board team. We look forward to his continued leadership as the company delivers on the next phase of its Leading Together strategy.” 

Peter Agnefjäll stated: “I am honored and humbled by the trust placed in me by my Supervisory Board colleagues. I have been impressed with the dedication and service to the communities our brands have displayed in the past few years, and it would be my pleasure to continue to support the leadership of the company going forward.” 

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.
    

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Peter Agnefjäll, Chair of the Supervisory Board of Ahold Delhaize, stated: “We are delighted that Frans will continue as President and CEO of Ahold Delhaize, subject to shareholder approval. Since he started in this role in July 2018, the company has continued to build on its strengths. Under Frans’ leadership the Leading Together strategy was introduced, which increased its ability to better serve its customers.”

“Frans and the executive team he built have demonstrated the long term validity of their strategic choices, delivering solid financial results. From this basis the company is able to contribute positively to communities and address the challenges facing our society, like keeping healthy and sustainable food affordable.”

Upon the nomination for reappointment, Frans Muller said: “I am grateful for the nomination and would be honored to continue to lead Ahold Delhaize, together with the Executive Committee colleagues, our great local brands and caring associates, making sure we support our communities and deliver on our purpose of helping our customers eat well, save time and live better.”

Frans Muller became President and CEO on 1 July 2018. Before that, he served as member of the Management Board and Deputy Chief Executive Officer and Chief Integration Officer since 2016. Prior to Ahold Delhaize, Frans was the President and CEO of Delhaize Group.

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

• Doubling down on creating deeper digital customer relationships with accelerated investments in scalable online capabilities
• Increasing focus on health and sustainability; bringing net-zero target forward to 2040 for direct carbon emissions in our own operations
• Introducing first-of-a-kind customer ecosystem in the Benelux, connecting shopping experiences across its food and non-food brands
• Explore subsidiary IPO of bol.com; Ahold Delhaize to retain significant long-term control

Key financial ambitions and preliminary guidance

• Accelerating sales growth rates 2023-2025 adding €10 billion by 2025
• Net consumer online sales expected to double and fully allocated e-commerce profitability expected by 2025
• bol.com projected 2021 net consumer online sales and EBITDA of ~ €5.5bn and ~ €150-170 million respectively, expected to approximately double by 2025
• Cumulative Save for Our Customers initiatives to yield ~ € 4 billion 2022-2025
• Delivering high-single-digit annual underlying EPS growth versus 2022
• Announcing a new €1 billion share buyback program to start at the beginning of 2022*
• Despite macro-economic headwinds, sales for 2022 are projected to increase versus 2021, and operating margins are planned ≥ 4.0%

Zaandam, the Netherlands, November 15^th, 2021 – At its 2021 Investor Day, Ahold Delhaize today announces the next chapter of its Leading Together strategy, which outlines key plans and targets towards 2025. Powered by its great local brands, this growth and investment plan underpins Ahold Delhaize’s vision to deliver the leading local food shopping experience for customers, placing value and convenience at the heart of its strategy. In addition, the company announced its intention to significantly step-up investments in digital and automation, to explore a subsidiary-IPO for bol.com, and increase focus and attention on accelerating its health and sustainability agenda.

Frans Muller, President & CEO of Ahold Delhaize, said: “Our Leading Together strategy has proven to be strong in recent years, and is a great foundation as we head into the future. The COVID-19 pandemic put our people and our strategic choices to the test, and through it all we were able to always deliver for our customers, our communities and our associates in all the brands and support companies. I cannot stress enough how proud I am of our achievements. The pandemic has accelerated the pace of change in the retail industry. It has also changed consumer behavior permanently with people shopping more online, eating more at home and having a bigger interest in local and healthier food.”

Building on the Leading Together strategy, the company has identified four priorities to double down on between now and 2025:

• Serve customers through deeper digital relationships across our omnichannel Customer Value Proposition (CVP)
• Accelerate development of/investments in omnichannel capabilities and continue to be the best local operators
• Lead the transformation into a healthy and sustainable food retail system
• Leverage the portfolio to create the ultimate ecosystem for smarter local customer journeys

Investing in Digital proposition

Ahold Delhaize and its great local brands exist to help people eat well, save time and live better. Customers are looking for high value, convenient and personalized solutions – and shop whenever and wherever they want. Ahold Delhaize will invest in its brands to provide shoppers relevant products and services, promotions, tailored customer experiences and premium subscription memberships. To enable customers to shop in this way, Ahold Delhaize will accelerate its investments in building scalable and repeatable operational capabilities, with a sharper focus on digital, online, data and automation.

In doing so, Ahold Delhaize expects to accelerate net sales growth with €10 billion in incremental sales from 2023-2025. Net consumer online sales are planned to double between 2021 and 2025. In addition, Ahold Delhaize plans to have eCommerce profitable on a fully allocated basis by 2025.

Natalie Knight, CFO Ahold Delhaize: “To support these plans, the company will increase investment levels from 3% to 3.5% per annum to fuel growth. We will continue to be the best operator in the industry, underlined by our world-class operating margins. As part of our planning toward 2025, we are committing to even more ambitious Save for Our Customers targets: ~ €4 billion by 2025. We will also use our knowledge and experience to make eCommerce profitable by 2025, and I am pleased to announce a planned €1 billion share buyback* for 2022.”

Establishing one of the largest supply chain networks on the U.S. East Coast

In 2019, Ahold Delhaize USA launched its supply chain transformation, focused on bringing back its supply chain as it builds out its omnichannel network and adding new facilities in key geographies.

Kevin Holt, CEO, Ahold Delhaize USA said: “With these changes, Ahold Delhaize USA will have full control of its supply chain and an optimized network at scale, which enables the local brands to better serve their customers, allows ADUSA to continue to invest in automation and digital capabilities to lower costs to serve, and ultimately enables direct to customer relationships as part of its omnichannel network. The transformation will create one of the largest supply chain networks on the East Coast. It is scheduled to be finished in April 2024, with 26 facilities in the integrated self-distribution network.”

First-of-a-kind customer ecosystem

The strong local presence of the Ahold Delhaize brands is a key factor in their success. This is illustrated by the New York metro area where Stop & Shop and Fresh Direct and their partners form an ecosystem to deliver fresh and healthy food wherever, however and whenever New Yorkers wish to shop.

In the Benelux, Ahold Delhaize has a unique position with its renowned supermarket brands Albert Heijn and Delhaize, online marketplace bol.com as well as Gall & Gall and Etos. Ahold Delhaize announces its first-of-a-kind customer ecosystem in which the Benelux brands will work closely together to connect shopping experiences across food and non-food, offering customers more convenience, value and relevance.

“Time is a precious commodity for our customers. Retailers who can simplify the customer journey will be most relevant in the long term, and powered by bol.com we believe we can be one of them. With the combined strengths of all the brands in the Benelux, we have a one-of-a-kind opportunity to create a truly comprehensive customer ecosystem”, said Wouter Kolk, CEO Ahold Delhaize Europe & Indonesia.

Explore subsidiary IPO of bol.com

After an extensive and thorough review considering the strategic opportunities for bol.com, during the past year, Ahold Delhaize has decided to build on the remarkable success, customer loyalty and leadership position of bol.com as a retail tech platform and explore a subsidiary Initial Public Offering (sub-IPO) for bol.com.

The rationale for this decision is to fully activate the opportunities for bol.com, to fuel its tremendous growth potential and to provide further funding for Ahold Delhaize to execute on its winning strategy. Bol.com will continue to play an important role in the strategic partnership with other brands of Ahold Delhaize in the Benelux.

It is envisaged that the sub-IPO will entail a listing of a limited interest on Euronext Amsterdam, and that Ahold Delhaize will retain significant control over bol.com in the long term to ensure its growth and development.

The sub-IPO is expected to happen in the second half of 2022, subject to multiple internal and external factors, including market conditions. Further details will be provided in due course.

Increasing focus on health and sustainability

Ahold Delhaize will further invest in, sharpen and strengthen its initiatives towards a healthy and sustainable food retail system. Amongst other sharpened ambitions, the company is bringing forward its scope 1 and 2 targets by committing to reach net-zero carbon emissions across its own operations no later than 2040 and to becoming a net-zero business across its entire supply chain, products and services by 2050 (scope 3).

Further, Ahold Delhaize has joined the Business Ambition for 1.5°C, a global coalition of UN agencies, business and industry leaders, in partnership with the Science Based Targets initiative (SBTi) and the UN led campaign ‘Race to Zero’. These and other ESG metrics will make up a bigger part of executive incentive programs going forward and will be supported by increased transparency going forward.

Frans Muller commented: “We realize that these are ambitious targets which require a lot of work over the coming years, and we feel encouraged by our double AA rating upgrade by MSCI and recently confirmed DJSI leadership position. But most importantly we are confident that these and the other targets included in today’s strategy update are achievable because of our highly engaged and committed associates.”

More information

Further plans and details will be provided during the Investor Day presentations, which will be available through webcast via www.aholddelhaize.com starting at 14:00 CET / 8:00 AM EST. Presentations will be shared on this website as well.

Please see the following overview of guidance that the Ahold Delhaize leadership will share during the presentations at the 2021 Investor Day:

* 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 potential changes in corporate activities, such as potential material M&A activity.

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Cautionary notice

This communication contains information that qualifies as inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

This communication includes forward-looking statements. All statements other than statements of historical facts may be forward-looking statements. Words and expressions such as announces/announcing, accelerat(ed)/(ing), growth, plans, intended/intention, sub-IPO, strategic, create(e)/(ing), increasing, target(s), forward, 2040, introducing, explore, retain, long-term, 2022/2023-2025, by, 2025, expect(s)/(ed), to, projected, yield, delivering, to start, beginning of 2022, next chapter, toward(s), vision, agenda, head into, future, permanently between now and 2025, lead, create, will, focus, planned, between 2021 and 2025, continue to, planning, committing, planned, ultimately, scheduled to, April 2024, be, opportunities, subsidiary Initial Public Offering, rationale, potential, further, winning, envisaged, second half of 2022, subject to, factors, in due course, ambitions, moving forward, no later than 2040, becoming, 2050, going forward, ambitious, and coming years or other similar words or expressions are typically used to identify forward-looking statements.

Forward-looking statements are subject to risks, uncertainties and other factors that are difficult to predict and that may cause the actual results of Koninklijke Ahold Delhaize N.V. (the “Company”) to differ materially from future results expressed or implied by such forward-looking statements. Such factors include, but are not limited to, risks relating to the Company’s inability to successfully implement its strategy, manage the growth of its business or realize the anticipated benefits of acquisitions; risks relating to competition and pressure on profit margins in the food retail industry; the impact of economic conditions on consumer spending; turbulence in the global capital markets; political developments, natural disasters and pandemics; climate change; raw material scarcity and human rights developments in the supply chain; disruption of operations and other factors negatively affecting the Company’s suppliers; the unsuccessful operation of the Company’s franchised and affiliated stores; changes in supplier terms and the inability to pass on cost increases to prices; risks related to corporate responsibility and sustainable retailing; food safety issues resulting in product liability claims and adverse publicity; environmental liabilities associated with the properties that the Company owns or leases; competitive labor markets, changes in labor conditions and labor disruptions; increases in costs associated with the Company’s defined benefit pension plans; the failure or breach of security of IT systems; the Company’s inability to successfully complete divestitures and the effect of contingent liabilities arising from completed divestitures; antitrust and similar legislation; unexpected outcomes in the Company’s legal proceedings; additional expenses or capital expenditures associated with compliance with federal, regional, state and local laws and regulations; unexpected outcomes with respect to tax audits; the impact of the Company’s outstanding financial debt; the Company’s ability to generate positive cash flows; fluctuation in interest rates; the change in reference interest rate; the impact of downgrades of the Company’s credit ratings and the associated increase in the Company’s cost of borrowing; exchange rate fluctuations; inherent limitations in the Company’s control systems; changes in accounting standards; adverse results arising from the Company’s claims against its self-insurance program; the Company’s inability to locate appropriate real estate or enter into real estate leases on commercially acceptable terms; and other factors discussed in the Company’s public filings and other disclosures.

Forward-looking statements reflect the current views of the Company’s management and assumptions based on information currently available to the Company’s management. Forward-looking statements speak only as of the date they are made, and the Company does not assume any obligation to update such statements, except as required by law.

This document does not constitute a prospectus within the meaning of Regulation (EU) 2017/1129 and does not constitute an offer to acquire securities. Any offer to acquire securities will be made, and any investor should make his investment, solely on the basis of information that will be contained in a prospectus to be made generally available in connection with such offering. When made generally available, copies of the prospectus may be obtained at no cost from bol.com or through the website of the bol.com. This press release is not intended for distribution in jurisdictions that require prior regulatory review and authorization to distribute a press release of this nature.

_{** 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.

Giant Food, UFCW Locals 27 and 400 (collectively the “Union Locals”) and the Pension Benefit Guaranty Corporation (“PBGC”) have reached an agreement on Giant Food’s funding obligations with respect to two multi-employer pension plans: the Food Employers Labor Relations Association and United Food and Commercial Workers Pension Fund (“FELRA”) and the Mid-Atlantic UFCW and Participating Employers Pension Fund (“MAP”). As a result of this agreement, the PBGC has approved the combining of MAP into FELRA (the “Combined Plan”) and has agreed to provide financial assistance to the Combined Plan following its insolvency, which is currently projected to occur in 2022. The agreement is intended to resolve all of Giant Food’s existing liabilities with respect to the FELRA and MAP Plans and improves the security of pension benefits for associates as well as reduces financial risk for Giant Food. Giant Food will invest approximately $800 million (~€650 million) into pension benefits for associates as part of this agreement. The pension-related investments announced by Ahold Delhaize during the course of 2020 - including those of National, 1500, and today’s announcement - have greatly reduced Ahold Delhaize’s financial exposure to the multi-employer pension plans of its U.S. brands, Giant Food and Stop & Shop, and were achieved without impacting the 2020 financial outlook due to the strong financial performance in the year-to-date, through Q3 2020 at Ahold Delhaize.

This agreement will not impact Ahold Delhaize’s previously issued financial guidance for 2020 and is also not expected to have a material impact on Ahold Delhaize’s free cash flows or underlying financial results beyond 2020. Further, this statement should not be interpreted as an update to any component of the previously issued 2020 outlook, announced in the Q3 2020 earnings release. 

The agreement consists of the following components:

• Following the combination of FELRA and MAP, the PBGC will provide financial assistance to the Combined Plan to fund benefit payments up to the level guaranteed by the PBGC. Giant Food will pay the withdrawal liability to the Combined Plan in monthly installments, commencing in February 2021 for the next 25 years.
• Giant Food will create a new single employer plan to cover benefits accrued by Giant Food associates under the Combined Plan that exceed the PBGC’s guarantee level following the Combined Plan’s insolvency (“excess benefits”).
• Giant Food will create a new multi-employer plan with Safeway to provide excess benefits for certain other participants in the Combined Plan for whom Giant Food previously assumed responsibility. Giant Food intends to exercise its option to withdraw from this plan, which is currently estimated to be approximately $10 million (€8 million) in total, at some point during the next few years.

Each of the above plans is a frozen plan, meaning that no further benefits will be accrued. With this agreement, Giant Food has significantly de-risked its pension exposure and has improved the security of pension benefits for plan participants. The above plans, in essence, remain defined benefit plans, as referred to in the ‘How we manage risk’ section of the 2019 Ahold Delhaize Annual Report for related risk factors for pension and other post-employment benefits. 

As part of establishing these plans, Giant Food will record an approximately $800 million (~€650 million) pension-related liability, with a corresponding reduction in the Ahold Delhaize FELRA and MAP multi-employer plan off-balance sheet liabilities. This pension-related liability will be recorded as a non-cash, pre-tax charge to pension expense, which will impact Q4 2020 IFRS results. This charge will be excluded from underlying results and will therefore not impact the previously issued underlying operating results outlook for 2020. On an after-tax basis, the charge amounts to approximately $554 million (~€450 million). 

Giant Food will also make contributions to a new variable annuity pension plan (“VAP”) for future service benefits for Giant Food associates who are represented by UFCW Locals 27 and 400. The VAP as well as the above plans are designed to protect benefit accrual of participants, with a significantly reduced risk of plan underfunding and improved visibility on annual contributions.

Overall, the total ongoing annual contributions to settle the Combined Plan and for the newly created plans are not expected to impact Ahold Delhaize’s underlying financial results going forward. The total impact to underlying net income does not differ materially to the impact from contribution amounts that have been in place for the previous plans, which totaled $37 million (€33 million) in 2019.

Ahold Delhaize’s full year 2020 free cash flow outlook, as well as future free cash flows beyond 2020, are not expected to be materially impacted by these agreements.  

Cautionary notice 

This communication contains information that qualifies as inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

This communication includes forward-looking statements. All statements other than statements of historical facts may be forward-looking statements. Words and expressions such as impact, 2020 (financial) outlook, update, obligations, to, following, projected, 2022, will, guidance / outlook for 2020, not expected, beyond 2020, next 25 years, in order to, intends to, estimated, to be, next few years, remains, Q4 2020 IFRS results, agreed to, ongoing, annual or full year 2020, or other similar words or expressions are typically used to identify forward-looking statements.

Forward-looking statements are subject to risks, uncertainties and other factors that are difficult to predict and that may cause actual results of Koninklijke Ahold Delhaize N.V. (the “Company”) to differ materially from future results expressed or implied by such forward-looking statements. Such factors include, but are not limited to, the risk factors set forth in the Company’s public filings and other disclosures. Forward-looking statements reflect the current views of the Company’s management and assumptions based on information currently available to the Company’s management. Forward-looking statements speak only as of the date they are made and the Company does not assume any obligation to update such statements, except as required by law.

• 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.

• Net sales were €19.1 billion, up 17.1%, or 15.9% at constant exchange rates
• In the U.S. and Europe, comp sales growth excluding gas was up 20.6% and 10.2%, respectively
• Net consumer online sales grew 77.6% at constant exchange rates; Ahold Delhaize will reach €7 billion net consumer online sales goal in 2020, one year ahead of plan
• COVID-19-related costs were approximately €330 million in the first half of the year, and approximately €260 million in Q2, including safety measures and enhanced associate pay
• Operating income was €1,004 million, increasing 78.0% at constant exchange rates
• Underlying operating margin was 5.3%, up 1.7% points from the prior year at constant exchange rates
• Diluted EPS was €0.65; diluted underlying EPS was €0.65, increasing 87.9%
• 2020 outlook raised, with underlying EPS growth in the low-to-mid-20% range; free cash flow expected to be at least €1.7 billion, net of paying the majority of a tentative U.S. pension plan withdrawal agreement
• 2020 interim dividend is €0.50, up 67% and based on 40% of first half 2020 underlying income per share¹

¹ from continuing operations

Zaandam, the Netherlands, August 5, 2020 – Ahold Delhaize, one of the world’s largest food retail groups and a leader in both supermarkets and eCommerce, reports second quarter and half year results today.

The interim report for the second quarter and half year 2020 can be viewed and downloaded at www.aholddelhaize.com.

Summary of key financial data

Comments from Frans Muller, President and CEO of Ahold Delhaize

"COVID-19 has presented adversity across society and business. It has impacted our communities, associates, customers, and their families. I would like to thank associates across all our local brands and support offices for their outstanding service during this crisis. Their agility and dedication have ensured the safety of our stores and distribution centers, sustained the strength of our supply chains, and helped nourish families and local communities. I am grateful for the commitment they have shown and continue to show. I am also pleased that we were able to make important investments in additional safety measures, enhanced associate pay and benefits, and significant charitable donations, including to several local food banks. Additionally, our brands hired more than 45,000 associates globally in Q2.

"The engagement and strong execution of our teams have translated this unprecedented demand in both the U.S. and Europe, due to COVID-19, into outstanding results. These developments, along with the benefit of comparing against the same quarter last year, when we saw a negative impact from the strike at the Stop & Shop brand in the U.S., have led to strong underlying operating margin performance in the quarter.

"Our Q2 performance illustrates the challenge all companies are facing in predicting results in the highly  uncertain environment created by COVID-19. Despite the high levels of market uncertainty, we are accelerating investments to support our increasing digital and omnichannel ambitions and raising our 2020 outlook due to our strong performance in the first half of the year. We now expect that our group underlying operating margin will be higher than in 2019, with underlying EPS growth in the low-to-mid-20% range. We are also raising our free cash flow target to at least €1.7 billion, net of paying the majority of the recently announced tentative U.S. pension plan withdrawal agreement.

"We continue to adapt to the changes we are seeing in consumer shopping patterns and behavior. One of these changes is the increased demand for our online offerings, which, combined with investments to increase capacity, has resulted in net consumer online sales growth of 127% in the U.S., at constant exchange rates, and 64% in Europe. Our increased investments in digital and omnichannel capabilities should lead to continued wallet share gains. As a result, we now expect over 55% growth in global net consumer online sales in 2020. This puts us on track to reach our goal of doubling global net consumer online sales from €3.5 billion in 2018 to €7 billion in 2020, one year earlier than we outlined at our November 2018 Capital Markets Day.

"We also remain dedicated to health and sustainability in these challenging times. During the second quarter, we published our inaugural Human Rights Report, outlining the steps we are taking to safeguard human rights. We also issued our first Sustainability Bond Report in June 2020, documenting how we used bond financing from 2019 to support sustainable products, reduce climate impacts and promote healthier eating. We have subsequently announced our commitment to achieve long-term, science-based targets on climate change, including the goal to reduce our own carbon emissions by 50% by 2030 and a new goal to reduce emissions from our overall value chain by 15%. After officially becoming a supporter of the Task Force on Climate-related Financial Disclosures (TCFD), we are in the process of developing voluntary and consistent climate-related risk disclosures.

"Our second quarter results reflect excellent operational execution by associates during the COVID-19 crisis. We will continue to make protecting and investing in the health and safety of associates and customers, as well as supporting our local communities, our top priorities."

Q2 Financial highlights

Group net sales were €19.1 billion, up 17.1%, or 15.9% at constant exchange rates, driven largely by 16.4% comparable sales growth excluding gasoline. Group comparable sales were mainly driven by demand related to COVID-19 and, to a lesser extent, benefited from the comparison against Q2 2019, when the strike and subsequent recovery at Stop & Shop in the U.S. unfavorably impacted sales by 2.0 percentage points. Group net consumer online sales grew 77.6% in Q2 at constant exchange rates. Group underlying operating margin in Q2 was 5.3%, up 1.7 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 as well as lapping the roughly €90 million operating profit headwind caused by the strike at Stop & Shop in the U.S. in the prior year's quarter. This was offset in part by significant costs related to COVID-19, which amounted to approximately €260 million in Q2, and approximately €330 million in the first half of the year.

U.S. comparable store sales excluding gasoline grew 20.6%, with all brands generating double-digit comparable sales growth. This was due largely to the COVID-19 outbreak and the lapping of last year's Stop & Shop strike, which unfavorably impacted Q2 2019 sales in the U.S. by 3.2 percentage points. Online sales in the segment were up 126.8% in constant currency. U.S. underlying operating margin was 6.1%, up 2.5 percentage points from the prior year at constant exchange rates, driven largely by operating leverage from higher sales growth due to COVID-19, as well as the aforementioned Stop & Shop strike (roughly   €90 million).

Europe's comparable sales excluding gasoline grew 10.2%, due largely to demand related to COVID-19, slightly offset by an unfavorable calendar shift impact of -0.1 percentage points in the quarter. Net consumer online sales in the segment were up 63.9%. Underlying operating margin in Europe was 4.5%, relatively flat compared to the prior year. 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. 

At bol.com, the online retail platform in the Benelux included within the Europe segment's results, net consumer sales grew by 65.4%. Bol.com's third-party sales grew 107% in the quarter, with nearly 34,000 merchant partners on the platform. 

Ahold Delhaize's net income was €693 million, up 107.6% in the quarter. Diluted EPS was €0.65, up 115.6%, and diluted underlying EPS was €0.65, up 87.9%. Nearly 8.1 million shares were purchased in the quarter for €183 million, bringing the total amount to €519 million in the first half of the year. The 2020 interim dividend is €0.50, up 67% versus the prior year, and represents 40% of first half 2020 underlying income per share from continuing operations.

Outlook

COVID-19 continues to create significant uncertainty for the 2020 outlook, though, due to the Company's strong performance in the first half of the year, guidance for underlying operating margin, underlying EPS, and free cash flow is being raised.

IFRS results will be unfavorably impacted by the withdrawal agreement to the UFCW International Union – Industry Pension Fund announced on July 21, 2020. If ratified by the UFCW Locals, the transaction will be treated as an extraordinary item and will, therefore, not impact the underlying operating results outlook for 2020.

Underlying operating margin is now expected to be higher than 2019 versus broadly in line with 2019 as previously expected. Embedded in this margin outlook is a lower margin rate in the second half of the year compared with the first half of the year. This is due to the expectation that sales growth will moderate relative to the first half of the year, which creates an operating deleverage effect when factoring in significant ongoing costs related to COVID-19 as well as investments in digital/omnichannel capabilities.  

The underlying EPS outlook for 2020, however, has been raised to low-to-mid-20% growth from mid-single-digit growth.

The 2020 free cash flow outlook has also been raised to at least €1.7 billion, compared to the previous outlook of over €1.5 billion, and now includes the effect of paying the majority of the €583 million pre-tax obligation for a tentative agreement to withdraw from the UFCW International Union – Industry Pension Fund and contribute to the transition reserve for the new variable annuity pension plan at Stop & Shop, which was announced on July 21, 2020. The capital expenditure guidance of around €2.5 billion is maintained and now also 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.

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

Pending ratification of this agreement, Stop & Shop expects to pay the National Plan withdrawal liability of $649 million (€567 million), on a pre-tax basis, to fulfill Stop & Shop’s obligations for past service for associates and retirees in the National Plan. Stop & Shop will also make an $18 million (€16 million) contribution to a transition reserve for a new variable annuity pension plan, described in further detail below. On an after-tax basis, the withdrawal liability and contribution to the transition reserve total approximately $500 million (€437 million). The withdrawal liability will be satisfied by installment payments to the National Plan over the next three years. Ahold Delhaize will therefore recognize a provision in these amounts, which will impact Q3 IFRS results. The provision will be excluded from both underlying operating profit and underlying earnings per share. While the majority of this obligation will be paid in 2020, the Group’s full year 2020 free cash flow outlook, which is expected to be in excess of €1.5 billion, will not be impacted due to the strong level of free cash flow generated in Q1.  

Kroger and Albertsons have also entered into separate tentative agreements with the UFCW Locals and the National Plan Trustees to withdraw from the National Plan. Together, Ahold Delhaize’s brand Stop & Shop, Kroger, and the UFCW Locals plan to create the UFCW International Union-Industry Variable Annuity Pension Plan for future benefits. This new plan is designed to protect the benefit accrual of participants, with a significantly reduced risk of plan underfunding and improved visibility on annual contributions. The annual contribution by Stop & Shop to fund the new variable annuity plan is expected to be nearly identical to the annual contributions previously estimated for the National Plan during the next eight years. Therefore, this change also has no impact to the previously issued financial outlook.  

These tentative agreements have been approved by Stop & Shop, the National Plan board of trustees and the UFCW local unions. They remain contingent upon approval and ratification by Stop & Shop and Kroger associates in 25 local UFCW unions, which is expected to occur by October 1, 2020. Together, these agreements are expected to materially improve the security of pension benefits for associates and reduce financial risk for the company.   

Cautionary notice 

This communication contains information that qualifies as inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation. 

This communication includes forward-looking statements. All statements other than statements of historical facts may be forward-looking statements. Words such as tentative, plan, will be, impact, outlook, update, updated, expects, would be, the next three years, will not be, future, risk, during the next eight years, expected, remain, contingent or other similar words or expressions are typically used to identify forward-looking statements. 

Forward-looking statements are subject to risks, uncertainties and other factors that are difficult to predict and that may cause actual results of Koninklijke Ahold Delhaize N.V. (the “Company”) to differ materially from future results expressed or implied by such forward-looking statements. Such factors include, but are not limited to the risk factors set forth in the Company’s public filings and other disclosures. Forward-looking statements reflect the current views of the Company’s management and assumptions based on information currently available to the Company’s management. Forward-looking statements speak only as of the date they are made and the Company does not assume any obligation to update such statements, except as required by law. 

Jan Hommen has a long tenure in the Supervisory Board of both Ahold Delhaize and before that, Ahold. At Ahold Delhaize, he has served as Chairman between 2018 and 2020 and as Vice Chairman between 2016 and 2018. At Ahold, Jan served as Chairman between 2013 and 2016 and as Vice Chairman between 2003 and 2007. 

Peter Agnefjӓll has been a member of the Supervisory Board since April 2019. He served as president and CEO of the IKEA group from 2013 to 2017. Peter’s appointment follows a recruitment and selection process comprising both internal and external candidates.

Jan Hommen said: “Although it is hard to leave Ahold Delhaize, the timely preparation and clarity on transition is particularly important in view of the macro-economic uncertainty in the coming years. Peter has been an outstanding member of the Board since he joined. He has extensive retail experience, leadership and knowledge of omnichannel and e-commerce, and is well positioned to lead the Board in supporting the company to deliver its Leading Together strategy.”

Peter Agnefjäll said: “I am honored and excited to be appointed by the Supervisory Board as its new Chairman. I look forward to working with Jan in preparation for the transition by the end of the year.”

Cautionary notice

This press release contains information that qualifies as inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

This communication includes forward-looking statements. All statements other than statements of historical facts may be forward looking statements. Words such as will, ensure or other similar words or expressions are typically used to identify forward-looking statements.

Forward-looking statements are subject to risks, uncertainties and other factors that are difficult to predict and that may cause actual results of Koninklijke Ahold Delhaize N.V. (the “Company”) to differ materially from future results expressed or implied by such forward looking statements. Such factors include, but are not limited to the risk factors set forth in the Company’s public filings and other disclosures. Forward-looking statements reflect the current views of the Company’s management and assumptions based on information currently available to the Company’s management. Forward-looking statements speak only as of the date they are made and the Company does not assume any obligation to update such statements, except as required by law.

Jan Hommen

Peter Agnefjӓll

• Net sales were €18.2 billion, up 14.7%, or 12.7% at constant exchange rates
• In the U.S. and Europe, comp sales growth excluding gas was up 13.8% and 9.8%, respectively
• Net consumer online sales grew 37.7% at constant exchange rates
• Operating income was €964 million, up 40.0% at constant exchange rates
• Underlying operating margin was 5.3%, up 0.9% points from the prior year
• Diluted underlying EPS was €0.59, up 49.5%; diluted EPS was €0.59

Zaandam, the Netherlands, May 7, 2020 – Ahold Delhaize, one of the world’s largest food retail groups and a leader in both supermarkets and eCommerce, reports first quarter results today.

The Interim report for the first quarter 2020 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 greatly admire the dedication shown by the associates across our brands, who have stepped up to serve their local communities in the face of the immense challenges arising from the COVID-19 crisis. We remain relentlessly committed to protecting the health and safety of associates and customers, and living up to our values, two of which are 'care' and 'teamwork.'

"Clearly, our Q1 sales performance across all geographies was impacted by the unprecedented demand and pressures created by the COVID-19 outbreak. We have responded by implementing additional safety and protective measures, enhancing associate pay and benefits, and making charitable donations to support local communities. The costs related to our efforts will more significantly impact subsequent quarters. Nevertheless, we maintain our full-year outlook that our group underlying operating margin will be broadly in line with 2019.

"Protecting the health and safety of our associates and customers remains our first and foremost priority, along with operating our brands and supply chains smoothly. We will keep monitoring and learning from changes in consumer shopping patterns and behavior. While it is still too early to know which paradigm shifts will emerge from the COVID-19 crisis, we continue to prioritize investments in accelerating our digital and omnichannel capabilities, as well as improving our store fleet, in order to grow our share of wallet.

“Separately, I'd like to welcome Natalie Knight, who was appointed as our CFO on April 8. With her demonstrated leadership in financial discipline and business transformation efforts, she is ideally qualified to help us accelerate our Leading Together strategy.”
 

Q1 Financial highlights

Group net sales were €18.2 billion, up 14.7%, or 12.7% at constant exchange rates, driven largely by 12.2% comparable sales growth excluding gasoline. Group comparable sales were favorably impacted by 26.9% growth in March due primarily to COVID-19, and unfavorably impacted by -0.3% points due to the net effect of a weather and calendar shift in the quarter. Group net consumer online sales grew 37.7% in Q1 at constant exchange rates. Group underlying operating margin in Q1 was 5.3%, up 0.9% points from the prior year, benefiting largely from the timing of unexpectedly higher sales that preceded the timing of significant investments related to COVID-19. This was a phenomenon that was more pronounced in the U.S. than in Europe, as Europe experienced earlier customer stockpiling in late February, and therefore saw earlier investments related to COVID-19, while the U.S. experienced later stockpiling in March.

U.S. comparable store sales excluding gasoline grew 13.8%, with all brands generating double-digit comparable sales growth due largely to the COVID-19 outbreak. Comparable sales were favorably impacted by 33.8% growth in March due primarily to COVID-19, and unfavorably impacted by less severe winter weather, which amounted to -0.8% points in the quarter. Online sales in the segment were up 42.3% in constant currency. U.S. underlying operating margin was 6.7%, up 1.7% points from the prior year, driven largely by the aforementioned timing benefit from higher sales preceding material COVID-19-related investments.

Europe's comparable sales excluding gasoline grew 9.8%, to a significant degree due to the COVID-19 crisis. Comparable sales were favorably impacted by 15.9% growth in March due primarily to COVID-19, and were also impacted by a calendar shift benefit of +0.4% points in the quarter. Net consumer online sales in the segment were up 36.3%. All countries in Europe experienced higher than normal demand, though in the central and southeastern European countries, demand grew slightly faster than the overall segment. Underlying operating margin in Europe was 4.1%, up 0.1% points from the prior year. The aforementioned timing benefit from higher sales preceding material COVID-19 investments was less pronounced in Europe, and the benefit was offset partly by higher pension expense in the Netherlands, amounting to €11 million, as well as additional planned investments in digital and omnichannel capabilities.   

At bol.com, the online retail platform in the Benelux included within the Europe segment results, net consumer sales grew by 39.5%. Bol.com's third party sales grew 66% in the quarter with nearly 21,000 merchant partners on the platform. 

Net income was €645 million, up 48.2%. Diluted EPS was €0.59, up 54.9%, and diluted underlying EPS was €0.59, up 49.5%.
 

Outlook

We maintain our full-year outlook, as updated on April 7. While COVID-19 has created uncertainty for the 2020 outlook, COVID-19 related investments became material at the end of Q1 and will become significantly more visible in subsequent quarters. We expect 2020 free cash flow to be above €1.5 billion. The upside is mainly related to strong levels of free cash flow generated in Q1, rather than delays in capital spending, as we had previously indicated. While some capital projects will inevitably be delayed, we are accelerating investments in digital and omnichannel capabilities. We remain committed to our dividend policy and share buyback program, but given the uncertainty caused by COVID-19, we will continue to monitor macroeconomic developments.

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, there will be margin dilution related to €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

Q1 Update

Regarding preliminary Q1 results, which will be reported in full on May 7th, Frans Muller, President and CEO of Ahold Delhaize, said: “We are extremely proud of the talented and hardworking associates across our brands around the globe, who have worked tirelessly to serve their local communities in this time of need during the COVID-19 crisis. Every one of our local brands remains committed to protecting the health and safety of associates and customers, and some of the steps being taken are detailed in a recent press release, which can be found here.

“Due to COVID-19, demand across our multichannel network in the Eastern U.S. and Europe increased significantly in Q1.  As a result, we expect Group net sales growth of approximately 15% in Q1, or 13% in constant currency. Comparable sales growth excluding gasoline is expected to be approximately 14% in the U.S., and 10% in Europe in Q1. In the U.S., we saw customers begin stockpiling in March, and experienced approximately 34% comparable sales growth excluding gasoline in the month. In Europe, we saw slightly earlier customer stockpiling, beginning in late February, which accelerated into March. Europe comparable sales excluding gasoline were up approximately16% in March.

“We expect underlying operating margin in Q1 to be above the prior year. This is partly due to a timing effect. The Q1 margin has benefitted from the higher sales trends experienced at an earlier stage compared to the timing of the significant investments made enhancing associate pay and benefits and implementing additional safety and protective measures, which have become material towards the end of Q1.”

Reiterating 2020 profit outlook and expecting to exceed prior FCF Guidance

Regarding the 2020 outlook, Frans Muller said: ‘’COVID-19 has created uncertainty for our 2020 outlook, and it is too early to know how this will ultimately impact our great local brands and the communities that they serve. Although we continued to experience higher than normal sales growth through the end of March, there is increased uncertainty in sales over the course of the year, especially as it applies to changes in consumer shopping patterns and behavior.

“Uncertain times call for a commitment to our purpose and especially our values, one of which is care. We are committing to this in abundance as we focus on operating our brands and supply chains smoothly, with associate and customer health and safety as our first and foremost priority. Investing in safeguarding associate and customer wellbeing will ensure our brands will continue to be able to serve the communities that rely on us in this time of great need.

“The timing of these investments in associate and customer safety and protection have become material towards the end of Q1. This means we are not likely to sustain the underlying operating margin level experienced in Q1. Nevertheless, we maintain our full year outlook, that the group underlying operating margin will be broadly in line with 2019. We continue to expect underlying earnings per share growth in the mid-single-digit range for the year.

“We expect free cash flow to exceed our previous guidance of €1.5 billion, due to our expectation that some capital programs will likely be delayed due to COVID-19. The free cash flow guidance expressly excludes M&A activity.

“Our cash and liquidity positions remain strong. We propose a cash dividend of €0.76 per common share for the financial year 2019, up 8.6% from last year. Our policy continues to be to target a dividend payout of 40-50% of underlying income from continuing operations in 2020. We have acquired €348.7 million of our own shares this year as of April 3, and intend to continue repurchases under the €1 billion share buyback program. However, given the uncertainty caused by COVID-19, we will continue to assess these policies throughout the year.

“We look forward to reporting our Q1 earnings in full on May 7, 2020.”

Cautionary notice

This communication contains information that qualifies as inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

This communication includes forward-looking statements. All statements other than statements of historical facts may be forward-looking statements. Words such as outlook, guidance outlook, remains, expect, expected to be, ultimately, are, ensure, will, continue, sustain, expecting to exceed, expectation, likely to, to target, continues to, intend, look forward or other similar words or expressions are typically used to identify forward-looking statements. 

Forward-looking statements are subject to risks, uncertainties and other factors that are difficult to predict and that may cause actual results of Koninklijke Ahold Delhaize N.V. (the “Company”) to differ materially from future results expressed or implied by such forward-looking statements. Such factors include, but are not limited to, the risk factors set forth in the Company’s public filings and other disclosures. Forward-looking statements reflect the current views of the Company’s management and assumptions based on information currently available to the Company’s management. Forward-looking statements speak only as of the date they are made and the Company does not assume any obligation to update such statements, except as required by law.

• Net sales of €16.7 billion, up 2.9% at constant exchange rates
• Net consumer online sales up 29.5% at constant exchange rates
• Operating income of €679 million
• Underlying operating income of €724 million, with underlying group operating margin of 4.3%
• Underlying EPS from continuing operations of €0.44, up 5.2% year over year
• U.S. comparable sales growth excluding gasoline +1.8%
• U.S. online sales growth accelerated to 26.3% at constant exchange rates in the third quarter

Zaandam, the Netherlands, November 6, 2019 – Ahold Delhaize, one of the world’s largest food retail groups and a leader in both supermarkets and eCommerce, reports third quarter results today.

Frans Muller, President and CEO of Ahold Delhaize, said: "We saw a strong overall performance at our U.S. brands, particularly at Food Lion and Hannaford. Stop & Shop is operating in a challenging sales environment, but we are encouraged by improving transactions as we move into the fourth quarter. Our ‘Re-imagine Stop & Shop’ program is off to a good start, and we are pleased with the sales uplifts seen in the 21 remodeled Long Island stores, which are performing in line with our expectations.

"U.S. comparable sales excluding gasoline were up 1.8% during the quarter, which included a 0.3% benefit from Hurricane Dorian. Excluding the net impact from Hurricane Dorian this year and Hurricane Florence last year, comparable sales excluding gasoline were up approximately 2% in the third quarter. Comparable sales were strong in light of challenging prior year comparisons. We were encouraged to see the two-year stacked comparable sales growth accelerated to 4.5% in the third quarter of 2019, adjusted for weather, versus 3.3% in the second quarter of 2019, adjusted for both the strike and calendar shift impacts. In addition, our online business in the U.S. grew by 26.3% at constant exchange rates in the quarter, giving us confidence that we can achieve over 20% growth in U.S. online sales in 2019.

"In the Netherlands, our performance remained solid, with 3.0% comparable sales growth. Market share at Albert Heijn was flat year over year in the third quarter, an improved trend over previous quarters. Net consumer online sales for the segment were up 30.7%. At bol.com, our online retail platform in the Benelux, net consumer sales grew by 34.0%. While one-time items benefited underlying operating margins in the Netherlands, this benefit was largely offset at the group level by the unfavorable year-over-year impact from insurance results. In Belgium, comparable sales excluding calendar impacts were down modestly, but we gained market share and the trend for both improved over the last quarter. In Central and Southeastern Europe, we saw a strong performance, particularly in the Czech Republic and Romania, and both Greece and Serbia improved over previous quarters.

"We continue to make progress on the execution of our Leading Together strategy. We are well underway with our Save for Our Customers program, which is now expected to deliver €600 million in 2019, higher than our previous target of €540 million. We achieved our goal of having more than 600 Click and Collect points in the U.S. by year-end, ahead of schedule, in October. Our fresh kitchen and culinary innovation center in Rhode Island, which will test new fresh own-brand food concepts and process fresh fruit and vegetables, is now ramping up. In the U.S. and Europe, we continue to innovate by testing various forms of frictionless payment.

"We remain focused on health and sustainability, in line with our purpose: 'Eat well. Save time. Live better.' We recently announced a global goal to reduce food waste by 50% by 2030 as part of the '10x20x30' initiative, which brings together 10 of the world's largest food retailers to engage with 20 of their priority suppliers to halve food loss and waste by 2030.

“Today we also reiterate our 2019 outlook announced during our second quarter 2019 results.”

Natalie joins Ahold Delhaize from Arla Foods, a global dairy company based in Denmark, where she most recently has served as Chief Financial Officer, overseeing the company’s Finance, Legal, and IT functions. In this role, she was instrumental in the company’s transformation and efficiency program, called Calcium, which meaningfully lowered the company’s cost basis. In addition, Natalie led the company’s digital strategy process and has driven significant cash generation and working capital improvements. She is a finance leader who puts particular focus on commercial and cross-functional performance management and has helped Arla make substantial progress in the area of sustainability finance.

Prior to joining Arla Foods, Natalie worked 17 years at adidas, a global sportswear manufacturer, serving in several financial roles including Investor Relations and M&A, where she led the acquisition of Reebok for adidas. She then served as CFO of adidas North America, where she led major cross-functional cost reductions and operational transformation efforts, returning the company to record profitability following the financial crisis of 2008/2009. Natalie’s last role with adidas was as SVP of Group Functions Finance, leading a finance team in strategic and financial support for the Group’s Global Operations, Procurement, Finance, Real Estate, Legal, HR, IT and Executive functions.

Natalie is an American by nationality and holds a Master of Economics from the University of Berlin, Germany and a Bachelor of Business and German from the University of Arizona, in the United States. 

Frans Muller, President and CEO of Ahold Delhaize, said: “I’m thrilled to have Natalie join Ahold Delhaize. She has worked in both the U.S. and Europe, across a variety of industries, including branded consumer goods and food products.  With her broad experience across several Finance areas, her commercial mindset, and her demonstrated leadership in cost reduction and business transformation efforts, she is the right leader to help accelerate Ahold Delhaize’s Leading Together strategy. I look forward to working with her.”

Natalie added, “I am excited to join Ahold Delhaize. With its Leading Together strategy and its brand-led model, I believe the company is well positioned to thrive in this new era of digital transformation in the food retail industry. I look forward to working with Jeff to ensure a smooth transition and support the company as it continues to win in its local markets.”

Jan Hommen, Chairman of the Supervisory Board said, “I would like to welcome Natalie to Ahold Delhaize and look forward to nominating her to the Management Board. I would also like to thank Jeff Carr for his distinguished service to Ahold Delhaize during the past eight years. During his tenure, he brought focus to both cost control and cash generation as well as financial leadership to both the acquisition of bol.com and the merger of Ahold and Delhaize. I wish him well in his future endeavors.”

Cautionary notice

This communication contains information that qualifies as inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

This communication includes forward-looking statements. All statements other than statements of historical facts may be forward-looking statements. Words or expressions such as will, have, is, accelerate, look forward, ensure, continues to or other similar words or expressions are typically used to identify forward looking statements. Forward-looking statements are subject to risks, uncertainties and other factors that are difficult to predict and that may cause actual results of Koninklijke Ahold Delhaize N.V. (the “Company”) to differ materially from future results expressed or implied by such forward-looking statements. Such factors include, but are not limited to, the risk factors set forth in the Company’s public filings and other disclosures. Forward-looking statements reflect the current views of the Company’s management and assumptions based on information currently available to the Company’s management. Forward-looking statements speak only as of the date they are made and the Company does not assume any obligation to update such statements, except as required by law.

Frans Muller, President & Chief Executive Officer Ahold Delhaize said: “I respect Jeff’s decision and wish him and his family all the best for the future. I would like to recognize Jeff for his significant contributions to the Company as he remains a great partner in helping shape Ahold Delhaize, in driving our Save for our Customers program, and in delivering on our commitments. I look forward to our continued collaboration through next April as we further implement our Leading Together Strategy.”  

Jeff Carr added: “It has been a pleasure to serve this great Company and its associates during the last eight years. I look forward to continue working with Frans to ensure a smooth transition and to help identify my successor.” 

The search for a successor has been started and further announcements will be made in due course. 

Cautionary notice 

This press release contains information that qualifies as inside information within the meaning of article 7(1) of the EU Market Abuse Regulation 

• Net sales of €16.3 billion, up 1.5% at constant exchange rates, impacted by the strike
• Net consumer online sales up 29.2% at constant exchange rates
• Underlying operating margin of 3.6%, including strike impact
• S. comparable sales growth excl. gasoline +2.3% adjusted for Easter and strike impact
• Net synergies of €512 million achieved from the integration
• 2019 interim dividend of €0.30, based on 40% of first half 2019 underlying income per share*

* from continuing operations

Zaandam, the Netherlands, August 7, 2019 – Ahold Delhaize, one of the world’s largest food retail groups and a leader in both supermarkets and eCommerce, today reports second quarter results.

Frans Muller, President and CEO of Ahold Delhaize, said: "Although our results were impacted by the strike at Stop & Shop, our other U.S. brands continued their strong performance. As we continue to see sales performance improve at Stop & Shop, we expect no significant impact from the strike in the second half of the year.

"U.S. comparable sales excluding gasoline were up 0.2% during the quarter, with the strike impact offset by the strong performance of our other brands, in particular Food Lion. Excluding the impact from the strike and subsequent period of sales recovery and the favorable timing of Easter, comparable sales excluding gasoline were up 2.3%. Our online business in the U.S. grew 14.4%, or 18% excluding the adverse impact of the strike and we remain confident that we can achieve over 20% growth in U.S. online sales in 2019.

"In the Netherlands, performance remained solid, with 3.1% comparable sales growth, adjusted for Easter. Net consumer online sales were up 34.4%, with bol.com, the most successful online retail platform in the Benelux, growing net consumer sales by 37.5%. In Belgium, comparable sales were slightly below last year, but underlying operating margins further improved compared to 2018. In Central and Southeastern Europe, the sales performance in Greece improved over previous quarters.

"During the quarter, we continued to make steady progress on the execution of our Leading Together strategy. We started the rollout of our "Re-imagine Stop & Shop" program on Long Island, implementing learnings from the Hartford, Connecticut, stores we remodeled last year. We also launched various fresh food initiatives across the businesses in both the U.S. and Europe, providing healthy and convenient meal solutions for our customers. Highlighting our commitment to sustainability, we successfully issued a €600 million Sustainability Bond, making Ahold Delhaize the first retailer to issue a euro-denominated Sustainability Bond.

"With the integration of Ahold and Delhaize now fully completed, we achieved net synergies of €512 million on an annual run-rate basis, slightly ahead of our target. We are well underway with our  Save for Our Customers program which is expected to deliver €540 million in 2019.

"Today, we also reiterate the 2019 outlook that we announced when we published our first quarter 2019 results.

“For the first half of 2019, we will pay an interim dividend of €0.30, based on 40% of first half 2019 underlying income per share from continuing operations.”