ZAANDAM, THE NETHERLANDS – Ahold has announced its Q3 2015 financial results, and with it, further updates on its pending merger with Delhaize.
In a conference call to investors yesterday, CEO Dick Boer explained, “As we announced in June, the merger will create stronger international food retailer with local brands that have market leading positions in complementary neighboring geographies. Substantial synergies at a trend rate of €500 million a year will lead to significant value creation and we’ll also be able to use strong cash flow generation to invest in future growth and deliver attractive return to shareholders.”
Boer added that while the company remains highly focused on running its day-to-day operations, it is making good progress with the integration planning. The transaction is still on schedule for completion by mid-2016, Boer says, and as we’ve previously reported, both he and Frans Mueller will be going together on a number of road shows to meet investors in the coming months.
The CEO also took a few moments during the investor call to mention the company’s new, millennial-focused banner, bfresh, saying that while its still early, Ahold has high hopes for its effectiveness.
“We have seen nice appetite of our customers in the markets where we are now testing these stores,” he explains. “But you can imagine, if bfresh works, we have an opportunity really in the larger cities to expand. On the East coast, we have opportunities to expand in these larger cities, but it’s too early to give a number on that I would say.”
Other than the developments in the Delhaize merger and its new bfresh banner, Ahold came through with a strong financial performance in its third quarter, reporting increases in sales, operating income, and net income.
Other highlights from Ahold’s third quarter report include:
- Group sales up 13.0% (up 1.7% at constant exchange rates)
- Sales excluding gas up 3.3% at constant exchange rates
- Underlying operating income increased to €319 million; underlying operating margin at 3.8%
- Strong free cash flow of €230 million, up €160 million
- Identical sales in the Netherlands up 4.0%, reflecting positive sales trends at Albert Heijn and in online
- Underlying sales trends in the United States continued to improve, with identical sales growth of 1.8% excluding gas, adjusted for competitive disruption last year
- Agreement reached for Stop & Shop to acquire 25 A&P stores in New York
For more on the upcoming merger, the company’s developing bfresh banner, and more, keep watching AndNowUKnow.
