With the Ahold Delhaize merger finally solidified, the newly combined company has hit the ground running.
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The combined company has 6,500 stores around the world and annual sales exceeding 60 billion euros, mostly from the USA, where it also owns the Food Lion and Giant chains. Pro-forma historical quarterly segment information will be published on October 6.
It said Thursday proceeds from those sales are $174 million, “resulting in no significant divestment gain or loss”.
Ahold and Delhaize have 6,750 stores in Europe and the United States and employ 380,000 people. Sales in Belgium were up 3.2% to €2.5bn (LFL +2.1%), while its Southeastern Europe operations recorded a 14.9% jump to €1.83bn (LFL +8.7%).
In Belgium, Ahold Delhaize will divest 13 stores, as part of the approval by the Belgian Competition Authority, as announced on March 15, 2016. United States comparable sales growth excluding gasoline was 1.4% for the quarter and 1.2% for the half year. The company’s net income was up 7.2% to 209 million euros for the quarter and up 10.3% to 406 million euros for the half year. It also still expects €350m in one-off costs related to the merger, of which €141m will be booked this year.
Looking ahead, the company said it is confident to meet synergy target of 500 million euros on an annual run-rate basis by mid-2019.
In the freshly released Q2 2016 financial report, Ahold and Delhaize, which will begin reporting joint financial statements in Q3, both reported better than expected earnings results, giving a small boost to stop pricing.
For the six months to 17 July, Ahold saw its underlying operating profit rise by 11.6% to €804m (constant-currency basis), net profit grew by 10.4% to €450m, and sales were up 3.6% to €20.7bn on the same basis.
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The company will also hold a Capital Markets Day on December 7 in London, where it will provide an update on its future strategy framework, share more details on integration and synergies, and give guidance on its capital structure going forward. The members of the Ahold Delhaize Management Board who acted as members of the Ahold and Delhaize boards during these reporting periods are the ones responsible for the respective standalone half-year reports.
