Zaandam, the
Netherlands, April 12, 2017 - Ahold Delhaize today held its
Annual General Meeting (AGM). The meeting was attended by 231
shareholders, representing approximately 1 billion
shares.
Shareholders adopted Ahold Delhaize's
2016 financial statements and determined the dividend over 2016 at
€0.57 per common share, to be paid on April 26, 2017.
Shareholders adopted all other
proposals on the agenda, amongst others: the reappointment of Jan
Hommen and Ben Noteboom as members of the Supervisory Board and the
appointment of PricewaterhouseCoopers Accountants N.V. as external
auditor for the financial year 2017.
Below is the text of the speech as
delivered by Chief Executive Officer Dick Boer during the
meeting.
Welcome to the first shareholder
meeting of Ahold Delhaize, another milestone for this company after
completing our merger last July.
I will give you a brief overview of
where we stand, what we stand for, what we have delivered and where
we are going.
We are Ahold Delhaize. An international
retailer, comprising 21 great local brands in 11 countries that are
number one or two in the markets they serve; powered by 370,000
associates working in more than 6,500 stores; demonstrating proven
skills in Fresh and own brands in both superior supermarkets as
well as omni-channel and digital platforms; focusing everyday on
affordability for customers and connection with communities; and
leading our industry in generating cash flows and returns for you,
our shareholders.
Our brands define us and... we are
Better Together.
Together, we build
great local brands, bringing fresh inspiration every
day.
This is our purpose. It is a
simple sentence but it says a lot about who we are.
Together
means we share best practices, learn from each other. The brands,
associates, customers communities, we are all part of
something bigger.
Great local
brands: Local retail businesses, on three continents, are
the core of our strategy. Each operating its own
brand.
Fresh
inspiration: It's about "fresh", referring to our
brands' fresh offering which is fundamental for their stores. But
it also means innovation and eCommerce.
And the final element, Every Day. Food retailing is a daily business;
both brands and associates are there for customers every single
day.
This purpose is a key element of our
Better Together strategy I will discuss it in more detail
later.
Before we go forward let's look back.
2016 was a great year for us.
We completed the merger, with strong
support from you. Thank you all.
We started delivering on our promises
to you and all our stakeholders.
And, very importantly, we continued to
deliver for customers thanks to the diligence and hard work of
associates across all brands.
The best measure of a retailer's
success is customer response and the consumers of our brands
definitely responded well. This was shown in strong net promoter
scores, which give an indication of customer appreciation, and
growing market shares in most of our markets.
The numbers also reflected this. We
increased sales, operating income and margins for the year. Our
Chief Financial Officer, Jeff Carr, will discuss this in detail,
but here are a few highlights.
Pro forma net sales rose 3.4% to €62.3
billion, at constant exchange rates and adjusted for the 53d week
of 2015. This was driven in particular by the Netherlands, Delhaize
America, and Central and South-eastern Europe, thanks to
customer-focused strategies, smart promotions, and good store
management.
We had a strong free cash flow, €1.4
billion, which allows us to not only invest and grow. It also
enables us to return excess liquidity to you, our
shareholders.
As you know we started a €1 billion
share buyback program in January. And we are pleased to
propose a dividend of €0.57 to our shareholders, an increase of
9.6% compared to Ahold last year. If you compare it to the old
Delhaize shares it would be up 50%, after adjusting for the merger
conversion rate.
So in summary, it was a big performance
in this special and intense year. I want to give our associates a
big compliment for that.
2016 was also significant because we
developed and launched our Better Together strategy.
In creating the strategy we looked both
inside and outside our businesses. Inside, we assessed our key
strengths: with customers, with products, with innovation, and with
logistics; we have several, as you may imagine from bringing
together two retailers with a combined 280 years of heritage. We
then coupled those strengths with the broader external trends we
see developing across the world and in our markets.
Those trends include a continued focus
by consumers on value. And that is not only driven by an increased
budget-consciousness in the wake of the economic crisis. Being
frugal is the new normal and it is easier than ever to compare
prices online.
A second trend is convenience,
Customers - and millennials in particular - have busy lifestyles
and still want to eat healthy and sustainable food. So this clearly
drives the popularity of fresh ready meal offerings, sometimes
consumed "now" in store, at the office, and sometimes "later"
at home.
A third major trend is health and
wellbeing. Diet-related diseases like diabetes and obesity are a
growing global issue. And on the other hand, more and more
consumers are more conscious of the impact of food.
Finally, customers demand relevant and
personalized offers and information. And they want access to it at
all times, a possibility since we are going digital.
Food retailers are evolving in line
with these trends, our landscape is changing. We see consolidation,
we see new competitors coming in and our traditional ones are
upping their games as well. We not only need to adapt constantly,
we need to predict the next change and lead the way.
Both our key strengths and the key
trends feed into the Better Together strategy as a logical recipe
for success, as a compass to guide us. And, I am happy to say, I
see that direction being embraced all around, in each market and
store I visit.
Our strategy contains several elements.
I have already mentioned the Purpose. The second element is our
sustainable business model, shaped like a wheel that we want to
keep rolling.
The wheel starts with our commitment to
continuously drive savings to invest in the customer proposition
and fund growth in our key channels. Saving to invest is core to
how we do business.
We save for customers by buying better,
through long-term, durable relationships with
suppliers.
We can save for customers when we
operate smarter.
Delhaize in Belgium, for example, in
2014 started a Transformation Plan to run more efficiently. As part
of the plan they implemented a new store organization in all
company-operated stores. They achieved good results on the cost
side, and now the focus is on fuelling the commercial side.
We also save for customers by wasting
less. Here in the Netherlands, the Instock team drives forward with
their mission to reduce food waste. Instock was founded by Albert
Heijn trainees a few years ago. They rescue surplus food from
Albert Heijn stores for instance and turn it into delicious meals,
in three restaurants in Amsterdam, The Hague and Utrecht, and on
the go in their Food truck.
Stop & Shop in the United States
has built a green energy facility which turns inedible food into
clean energy that powers one of their distribution centers.
Saving for our customers allows us to
invest and there we focus on four areas which we see as key.
We want products to be affordable for
all. We want to offer the best own brands. We want products to be
fresher & healthier. And we want our brands to offer the most
local and personal service.
Let's zoom in on fresher &
healthier because I believe we are really making a difference here.
Across our brands the teams are working hard in this respect, with
product reformulation, cutting back on salt, sugar, and fat. Ahold
USA took out more 272 thousand pounds of sugar from products - the
equivalent of 30 school buses - during 2016. Delhaize cut 25% of
salt from 11 varieties from bread.
And we're not doing it alone. Instead
we're cooperating with our industry and in many cases leading the
way. For example, together with the food retailers and
manufacturers who are members of the Consumer Goods
Forum.
Our brands also continue to surprise
customers with innovative products that are not only healthy but
also tasty and convenient, like Albert Heijn's vegetable spreads.
And it is about information and education. In the U.S., the Guiding
Stars program that originated at Hannaford to provide a nutritional
navigation system will be adopted by more of our brands.
The third element in our sustainable
business model is funding growth in key channels. And our number
one channel is, of course, supermarkets. What our brands are doing
with them makes me proud.
We are expanding, look at Mega Image in
Romania which opened its 500th store.
We are making stores even more
appealing for customers - look at Alfa Beta in Greece which opened
new flagship stores in Athens and Thessaloniki.
We are innovating the inside and
outside of stores. Here in the Netherlands, Albert Heijn opened a
state of the art Albert Heijn XL store in Purmerend with truly
innovative features such as a fresh herb garden where customers can
pick their herbs. And it is their most sustainable store too, so
it's also innovative in terms of construction.
Or look at Hannaford's innovative store
in Bedford, New Hampshire which really caters to the needs of
today's customers. For instance with made-to-order food they can
take out or enjoy at the store and fruits and vegetables cut at
their requests. The store has a pick up point for shopping done
online. Learnings from this great store will be deployed in other
remodels.
But we of course also fund growth in
our eCommerce brands, and they are growing fast, at more than 27%
growth in 2016. Bol.com grew consumer online sales even by more
than 30%. They increased service to customers by offering same-day
delivery to your home for instance. And to keep up with their
growth, they are building a new distribution centre in Waalwijk,
which they expect will create 1,000 jobs in future in the region.
AH.nl, also in the Netherlands, expanded and now serves 25% more
customers. Peapod, in the U.S. launched an own-brand line of fresh
meal kits.
As part of our Better Together strategy
we have set ambitious 2020 growth targets, to double online sales
as we continue to capture opportunities across our brands.
Our strategy is completed by values and
promises, to customers, associates and communities. A better place
to shop, a better place to work and a better neighbor - every day.
All brands share these promises, but bring them to life locally
according to what is best for their customers. As an example,
look at Food Lion and their Easy Fresh and Affordable
strategy.
In the examples I have shared I hope
you have noticed that being a sustainable retailer is embedded in
our strategy. It's on our minds as we grow, innovate and
save.
All the brands of Ahold Delhaize share
a commitment to making a positive impact on the lives of customers,
associates and communities they serve.
We focus on promoting healthier living,
reducing food waste and creating a healthy and inclusive workplace.
And we have clear targets. By 2020, we want 45% of own brand sales
to come from healthy products. I already shared some of the big
steps we are taking. We work to reduce food waste by 20
percent.
At the same time we continuously work
on product safety and sustainability, climate impact, associate
development, safety at work, as areas we simply need to get
right.
And the same applies to local community
connections, a natural and essential part of who we are, and how
our businesses can make a difference. Making a difference, that is
what all the brands are doing.
In order to continue to deliver, we
will have to execute on our strategy and drive change. We need to
take full advantage of our combination by sharing and learning from
one another. They are keys to the success of our company. Think
about bol.com. They are able to build a unique experience for each
customer, based on browse, buy and response behavior, demographic
and social-economic data and timing and trigger events. Keep in
mind, they have seven million active customers in the Netherlands
and Belgium and 47 million customer visits per months, and over 15
million products, so they have a lot of data to build on. We are
already sharing some of their capabilities across our supermarket
brands now. That is just one example where we are already reaping
the power of Ahold Delhaize.
When we do fully realize our potential,
our brands will be recognized by customers, for being the most
personal retailer. I have been in retail all my life and one thing
that I have learned that it is all about people. It is about the
connection and interaction, online and in stores, with customers
but also with all our other stakeholders. The brands in our group,
each with its own strong heritage and proposition, are uniquely
positioned to have this local connection.
We have excellent stores, as a physical
location to welcome and inspire customers and to connect their
communities.
We have own brands which are loved by
customers - a huge asset. If your store's own brand is in
your customer's fridge, then it becomes personal. They allow us to
distinguish from manufactures. And it is where we are
innovative.
We have popular and growing loyalty
programs.
And achieved more than €2 billion in
consumer online sales. Not bad for brands that trace their roots to
the 19th century.
Personal connections in this day and
age - A great example is what Albert Heijn is doing in this
respect, with Appie Today, its own online TV channel.
In addition to our strategy which I
just shared, we have also been working hard on our integration. It
is going well and we remain on track to deliver our committed €500
million synergy goal in 2019. As we've previously stated, this will
be delivered to the bottom line.
In 2017 we expect a total of €220
million synergies, including the €22 million realized in
2016.
We were able to do this thanks to a
strong leadership team we had in place from the start. I want to
thank our Supervisory Board for their support throughout the merger
process. The good interaction with them is key.
With our strategy set and integration
on track, we are well positioned for future success.
As Ahold Delhaize, we deliver both
critical scale and local relevance to our core markets and
customers.
As Ahold Delhaize we have created a
superior financial and strategic platform for innovation,
investment and growth, supported by our strong operating cash
flow.
As Ahold Delhaize we can provide more
opportunities for our people and invest more in our communities as
part of our Sustainable Retailing commitment.
Finally, our strong presence on both
sides of the Atlantic gives us the opportunity to share local best
practices across our network and learn from each other.
Delhaize, our oldest brand, celebrates
its 150th anniversary this year. Albert Heijn turns 130 and Food
Lion 60. We are proud of all our brands longevity and heritage, but
even more so of the fact that they reinvent and transform
themselves ever day to stay fresh and relevant to their customers.
And it is exactly this characteristic that enables us to define the
future, instead of letting it define us.
We are almost nine months into our
merger. I have shared with you the important progress we have made
so far, while continuing to run our businesses. I have also shared
with you where we see this company going. I hope you will share my
satisfaction on our 2016 achievements, and more importantly, my
excitement for what lies ahead.
So thank you. Thank you to our
customers, who trust us for their daily shopping and inspire us.
Thank you to all the associates in all the brands. To the
affiliates and franchisers.
And of course I want to thank you, our
shareholders for your support and faith in Ahold Delhaize.
170412_AGM_Ahold Delhaize
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Ahold Delhaize via Globenewswire
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