Ahold Delhaize this week reported strong second quarter 2017 results, driven by an improvement in sales and merger synergies resulting in higher margins, according to the company.
Dick Boer, CEO of Ahold Delhaize, said, “We are pleased to report a strong set of results. Sales improved across the board and the group’s underlying operating margin increased by 30 basis points to 3.9 percent as merger synergy savings continued to track ahead of projections.”
Boer had high praise for the company’s U.S. banners, “In the United States, our sales performance improved with returning inflation, while margins expanded on the back of strong synergy savings. Our U.S. brands are well-placed in a fast-changing competitive landscape. We continue to improve the price positioning of our Ahold USA brands and have developed effective competitive plans for Food Lion, facing new competition.
“In the United States we are making good progress in setting up Retail Business Services, combining scale and building expertise in own brands, digital and IT. Additionally, we are implementing a brand-centric operating model to strengthen local competitiveness in our markets and we expect a one-off restructuring charge of €70 million related to this, mainly in 2017.”
Boer also provided a one-year update on the Ahold Delhaize merger.
“A year after the merger between Ahold and Delhaize, the integration of the two companies is fully on track and delivering results as we continue to focus on strengthening our local brands through our Better Together strategy. We expect to achieve gross synergies of $750 million by 2019, of which $250 million will be reinvested in our brands.
“We look toward the second half of the year with confidence and expect our underlying operating margin for the full year 2017 to be broadly in line with the first half of the year, with €220 million net synergies for 2017.
“We have a successful omni-channel strategy in place that combines a thriving network of brick-and-mortar stores with leading online businesses. We are accelerating investments in our e-commerce operations to further unlock their promising growth potential. We expect close to $3 billion of online consumer sales in 2017, putting us on track to achieve nearly $5 billion by 2020.
