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Press release
Zaandam, the Netherlands, February 28, 2018 – Ahold Delhaize, one of the world’s largest food retail groups and a leader in both supermarkets and e-commerce, continued its strong performance during the fourth quarter of 2017.
Dick Boer, CEO of Ahold Delhaize, said: "2017 was the first full year as Ahold Delhaize, one in which we substantially completed the integration. We delivered synergies ahead of schedule and continued to show underlying operating margin expansion with stable or increasing market share in our major markets.
"In a dynamic environment, our great local brands delivered strong results, tapping into changing consumer behavior. We grew our online consumer sales by more than 20%, with already €1.2 billion sales in food online. In 2017 we realized €2.8 billion online consumer sales and are well on track realizing nearly €5 billion by 2020. We are expanding our digital capabilities in all our brands and are rolling out successful customer loyalty programs. In 2017 we sent out close to 2.5 billion personalized offers, which we expect to increase significantly in 2018.
"We are investing to make shopping more convenient, introducing new technologies to improve the customer experience and further ease the check-out process, as we live up to our promise to be a better place to shop. We also are stepping up our focus on fresh inspiration as customers are increasingly looking for healthier options, organic products and locally grown produce, which will help us to reach our target of 50% healthy products in own brand sales by 2020.
"Both Ahold USA and Delhaize America reported strong underlying operating margins, driven by synergies. Inflation remained at low levels and volumes at Food Lion continued to benefit from the implementation of its "Easy, Fresh and Affordable" program that has now been rolled out to more than half of its store base. Hannaford reported its 15th consecutive quarter with positive comparable sales growth.
"In the Netherlands, the supermarkets and our online businesses showed strong sales performance, supported by successful commercial campaigns and a strong holiday season. Both ah.nl and bol.com reported record sales in December, benefiting from investments in 2017 to increase capacity in their fulfillment centers.
"In Belgium, new leadership is in place and developing plans to improve commercial, logistical and operational performance. In Central and Southeastern Europe, the good performance in all four markets was partly offset by Greece, where comparable sales reflect a competitive landscape that is normalizing compared to 2016.
"We are making good progress deploying our Better Together strategy and are on track implementing our brand-centric organization at Ahold Delhaize USA, which we expect to be completed by the end of the first quarter of 2018. The synergy delivery is ahead of schedule, with €268 million net synergies realized for the year.
"In 2017 we delivered a strong free cash flow of €1.9 billion, allowing us to continue to invest in our store network, grow our omni-channel offering and further develop digital capabilities, providing customers with a unique and competitively priced offer. We will return a record €2 billion through our share buyback program for 2018, while maintaining our strong financial foundation and commitment to continually invest across our business.
"We are pleased to propose a €0.63 dividend to our shareholders, an increase of 10.5% compared to 2016, reflecting our ambition of sustainable growth of the dividend per share."
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This communication includes forward-looking statements. All statements other than statements of historical facts may be forward-looking statements. Words such as driving, proposed, already, on track, realize, 2020, expanding, rolling out, expect, increase, 2018, investing, promise, will, target, plans, improve, is normalizing, progress, strategy, to be, schedule, continue, grow, develop, providing, maintaining, propose, ambition, sustainable, improving, opportunity, solution, allowing, future, remains committed, incremental, are to be, enables, progressing, is becoming, as of, outlook, realizing, confident, reach, focused, going forward, not yet, held for sale coming years, starting, may, from time to time, forward, conditions, commitments, maturity, contingencies, available, short-term, long-term, due on, until and subject 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 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.
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.