Ahold Delhaize ends 2019 on a high

Ahold Delhaize ends 2019 on a high
Photo: Ahold Delhaize

Ahold Delhaize ended 2019 on a high: sales and profit increased slightly more than expected, and online sales grew by more than 30 %. Dutch Albert Heijn and Belgian Delhaize both gained market share, American growth came mostly from online.



In the fourth quarter, all key indicators improved: the group achieved sales of 17.4 billion euros (+ 3.1 %) and a net profit of 544 million euros (+ 6.9 %). Online sales increased by 30.9 % to 1.4 billion. For the full year 2019, sales exceeded 66 billion euros (+ 2.3 %), and net profit was 1.766 billion euros (- 0.8 %), with a 28.6 % increase in online sales.


CEO Frans Muller is satisfied as the retailer outperformed the forecasts for underlying earnings per share and met the targets for free cash flow. He also pointed out that this occurred "despite significantly stepping up capital investments in order to drive long-term growth in our business."


Delhaize is stable

In the Netherlands, comparable sales increased by 4.3 % in the fourth quarter, and the operating margin increased from 5.0 to 5.2 %. Albert Heijn managed to significantly improve its market share after a strong final sprint. Online sales in the Netherlands amounted to 768 million euros in the fourth quarter (+ 19.4 %): webshop bol.com saw sales grow by 28.7 %, mainly thanks to partner sales.


For the full year, online turnover in the Netherlands amounted to 2.4 billion euros (+ 21.6 %). Analysts are concerned about the impact of the arrival of Amazon in the Benelux and point out that the group has painstakingly concealed detailed figures on the performance of bol.com.


In Belgium, comparable sales increased by only 0.1 %. Delhaize was able to increase its market share, both in the fourth quarter and for the full year 2019, for the second year in a row. The retailer also improved its operating margin, which rose from 3.0 % to 3.5 %. Still, the chain continues to be the weakest in the group. Online sales grew by 10.5 %. Throughout the entire year, Delhaize’s online turnover amounted to 57 million euros, an increase of 14.4 %.


Online growth in the USA

In the United States, comparable sales grew by 2.3 %, mainly thanks to online growth of 42.7 %. Nevertheless, the retailer is making adjustments: Ahold Delhaize is discontinuing Peapod's online activities in the Midwest region to fully focus on the East Coast. Next year, the retailer wishes to establish 1,000 pickup points there and achieve growth in turnover of more than 30 %.


"Although we will make significant investments in 2020 to drive long-term growth, we expect group underlying operating margin in 2020 to be broadly in line with 2019,” Muller concludes. In 2020, he expects modest growth in underlying earnings per share.