Ahold Delhaize announces accelerated growth and investment plan to
drive more customer value
Management to share plans on intended sub-IPO bol.com and
increased investments in digital proposition and sustainability at
today’s Investor Day Leading Together strategic
highlights
- 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 15th,
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 propositionAhold 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 CoastIn 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.comAfter 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 sustainabilityAhold
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 informationFurther 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:
Financial Metrics |
2025 Ambitions |
Net sales |
€10 billion incremental sales vs 2022 |
Underlying Operating Margin |
Maintaining industry leading margin |
Net consumer online sales |
Double versus 2021 |
Save for Our Customers |
~ € 4 billion 2022-2025 |
Complementary revenue streams |
~ €1 billion by 2025 |
Annual underlying EPS |
High-single-digit versus 2022 |
Annual capital expenditures |
3.5% of sales |
Cumulative free cash flow |
> € 6 billion 2022-2025 |
* 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.
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),
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now and 2025, lead, create, will, focus, planned, between 2021 and
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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.
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