As a listener to Ahold Delhaize's conference call ($AD (+0.34%) ) on the results for the fourth quarter and full year 2024, I was able to gain the following insights:
Ahold Delhaize looks forward to a successful year 2024 in which the most important targets were achieved or exceeded. The company's focus is on the "Growing Together" strategy, with the aim of grow faster than the industry average, maintain leading margins and achieve sustainable profit growth. Customer engagement, market growth, cost reduction and commitment to healthy communities play a central role in this.
In financial terms, Ahold Delhaize was able to generate net sales of 89.4 billion euros for the full year, which corresponds to growth of 0.9%. Comparable sales increased by 1.4% in the fourth quarter. The underlying operating margin for the full year was 4.0% and diluted underlying earnings per share were in line with expectations at 2.54 euros. The free cash flow of over 2.5 billion euros exceeded exceeded expectations.
For 2025, Ahold Delhaize expects further growth, an underlying margin of around 4%, a mid to high single-digit increase in diluted underlying earnings per share and free cash flow of at least EUR 2.2 billion. The integration of Profi (a Romanian food retailer) is expected to increase net sales by around EUR 3 billion.
Various topics were discussed in greater depth in the subsequent Q&A session:
Integration of ProfiIn the long term, Profi is to be aligned with the European margins of the other brands, with the synergy effects taking effect from 2026.
Price investments in the USA: The investments already made are showing initial success in the form of volume growth, particularly at Stop & Shop in Rhode Island. Further investments are planned over the course of the year.
US margin: Despite price investments and other factors such as the growing online and pharmacy business, a stable margin is expected for the year as a whole.
M&AAhold Delhaize is generally open to inorganic growth, provided it fits the strategy.
Outlook: The outlook for 2025 includes earnings per share growth in the mid to high single-digit range, with free cash flow of at least EUR 2.2 billion.
EuropeThe improvement in earnings in Europe is primarily due to the successful restructuring in Belgium and the good performance of Albert Heijn.
Overall strategyThe "Growing Together" strategy includes average sales growth of 4% and an average margin of 4% over the entire period.
In summary, it can be said that Ahold Delhaize optimistic about the future and is focused on achieving its strategic goals. I find the acquisition of Profi particularly exciting, which means that Ahold Delhaize now has a better presence in Eastern Europe. For me, this is a very exciting market and I think there is more growth to be had there than in the rest of Europe.
I hope you enjoyed the summary.
Stay tuned!
