Zaandam, the Netherlands, March 1, 2017 - Ahold Delhaize, a leader in supermarkets and eCommerce with market-leading local brands in 11 countries, reported a strong fourth quarter and full year performance with solid sales growth and margins in the year of its landmark merger.
Dick Boer, CEO of Ahold Delhaize, said: "2016 was not only a year where we brought together two strong food retailers. It was also a year in which our great local brands drove solid performance, serving our customers both in stores and online.
"I am very pleased with the financial results in the fourth quarter with volume growth and strong margins, while making good progress implementing our Better Together strategy which we announced in December. Our teams are working hard on the integration, leveraging best practices and realizing synergy targets.
"Pro forma sales grew by 2.8% in the fourth quarter at constant exchange rates and adjusted for the 53rd week in 2015, driving volumes while operating in a deflationary environment in the U.S.
"Ahold USA continued to focus on its “Heading Northeast” strategy by offering better value, better quality and improved service to its customers, resulting in resilient volume trends. Underlying operating margin performance was slightly better than last year, adjusted for week 53 last year, supported by ongoing cost initiatives and synergies.
"Delhaize America showed continued good performance at both Food Lion and Hannaford with strong volume growth, more than offsetting the impact of deflation on sales. Underlying operating margins improved, driven by the "Easy, Fresh & Affordable" strategic initiative and synergies.
"In The Netherlands performance was outstanding, driven by both supermarkets and our online businesses ah.nl and bol.com. Underlying operating margin exceeded last year’s margin, reflecting operational efficiency and synergies.
"In Belgium, sales performance reflected a softer holiday season compared to 2015. However, underlying operating margins slightly improved due to capturing synergies.
"In Central and Southeastern Europe sales growth was mainly driven by Romania. Underlying operating margins decreased mainly due to our Serbian and our Czech business.
"Our strong free cash flow of €1.4 billion for the full year allows us to continue to fund growth in key channels, as well as to return excess liquidity to our shareholders. In January, we started a €1 billion share buyback to be carried out throughout 2017.
"Finally, we are pleased to propose a dividend of €0.57 to our shareholders, an increase of 9.6% compared to Ahold last year, representing a payout ratio of 48% of pro forma underlying income from continuing operations."
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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 risks relating to competition and pressure on profit margins in the food retail industry; the impact of the Company’s outstanding financial debt; future changes in accounting standards; the Company’s ability to generate positive cash flows; general economic conditions; the Company’s international operations; the impact of economic conditions on consumer spending; turbulences in the global credit markets and the economy; the significance of the Company’s U.S. operations and the concentration of its U.S. operations on the east coast of the U.S.; increases in interest rates and the impact of downgrades in the Company’s credit ratings; competitive labor markets, changes in labor conditions and labor disruptions; environmental liabilities associated with the properties that the Company owns or leases; the Company’s inability to locate appropriate real estate or enter into real estate leases on commercially acceptable terms; exchange rate fluctuations; additional expenses or capital expenditures associated with compliance with federal, regional, state and local laws and regulations in the U.S., the Netherlands, Belgium and other countries; product liability claims and adverse publicity; risks related to corporate responsibility and sustainable retailing; the Company’s inability to successfully implement its strategy, manage the growth of its business or realize the anticipated benefits of acquisitions; its inability to successfully complete divestitures and the effect of contingent liabilities arising from completed divestitures; unexpected outcomes with respect to tax audits; disruption of operations and other factors negatively affecting the Company’s suppliers; the unsuccessful operation of the Company’s franchised and affiliated stores; natural disasters and geopolitical events; inherent limitations in the Company’s control systems; the failure or breach of security of IT systems; changes in supplier terms; antitrust and similar legislation; unexpected outcome in the Company’s legal proceedings; adverse results arising from the Company’s claims against its self-insurance programs; increase in costs associated with the Company’s defined benefit pension plans; and other factors discussed in the Company’s public filings and other disclosures.
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