With overall sales up 1.6 percent and the integration of Ahold and Delhaize completed, Ahold Delhaize reported a strong 2017 fourth quarter and further plans for 2018 announced by Dick Boer, CEO of Ahold Delhaize.
“2017 was the first full year at Ahold Delhaize, one in which we substantially completed the integration,” Boer said. “We delivered synergies ahead of schedule and continued to show underlying operating margin expansion with stable or increasing market shares in our major markets.”
Boer mentioned the strong operating margins at Ahold USA and Delhaize America, driven by synergies and inflation at low levels. Maine-based Hannaford reported its 15th consecutive quarter with positive comparable sales growth.
Boer also touched on the synergy efforts.
“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,” he said. “The synergy delivery is ahead of schedule with $268 million in net synergies realized for the year.”
Boer noted other achievements, tapping into changing consumer behavior. Ahold-Delhaize grew its online consumer sales by more than 20 percent, realizing $2.8 billion in online consumer sales and is on track to realize $5 billion by 2020. He also expounded on the company’s digital capabilities.
“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,” he said.
Boer also laid out plans for 2018 to improve the checkout process and further plans for healthier options for its customers.
“We are investing to make our shopping more convenient, introducing new technologies to improve the customer experience and further ease the checkout process as we live up to our promise to be a better place to shop. We are also 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 reach our target of 50 percent healthy products in our brand sales by 2020,” he said.
Boer noted with a strong free cash flow of $1.9 billion, Ahold Delhaize will invest in its store network, grow its omni-channel offering and further develop digital capabilities. The company will return a record $2 billion through a share buyback program for 2018.
Ahold Delhaize will propose a 63-cent dividend to its shareholders, an increase of 10.5 percent compared to 2016.
