Ahold Delhaize exceeds expectations and increases forecasts

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Despite a difficult basis for comparison, Ahold Delhaize reported strong figures in the second quarter, with Albert Heijn and bol.com topping the charts. The group raised its earnings estimates for the full year 2021.

 

Strong online growth

Food retail group Ahold Delhaize recorded sales of 18.6 billion euros in the second quarter of this year, up 3 percent at identical exchange rates. With a comparable increase in sales of 2.4 percent, the group did better in Europe than in the US (-1.5 percent), where the easing of corona measures started earlier and where consumers also hoarded more last year. Online sales grew by 35.8 percent. The operating margin was 4.5 percent, down 0.8 percentage points from last year. The operating result amounted to 832 million euros, a decrease of 12.2 percent.
 

In Europe, Albert Heijn, bol.com and the operations in the Czech Republic were among the standouts. Web shop bol.com saw a 24.2 percent increase in revenue. Sales by sales partners grew by 26 per cent. There are now almost 47,000 entrepreneurs active on the platform. In the Benelux, the merged group's brands again gained market share, Ahold Delhaize reported during a conference call, but the retailer did not provide more details.

 

High demand for food at home

These are strong figures in view of the exceptional sales increases during the corona pandemic last year and they are also significantly better than what analysts had expected. Despite the ongoing uncertainty, the retailer feels confident enough to raise its expectations for this year: Ahold Delhaize is now targeting a gross operating margin of 4.3 percent (up from 4 percent previously). According to the group, profits will increase by 10 to 20 percent in comparison to 2019 (compared to 10 to 15 percent previously).
 

Even after the reopening of society, food-at-home demand remained very resilient, explains top executive Frans Muller. "Many of the habits formed by consumers during the COVID-19 pandemic in 2020 are proving sticky, aided by our initiatives to improve our omnichannel offerings for consumers."