2009 Annual Results Delhaize Group

Transcription

1 2009 Annual Results Delhaize Group Brussels - March 11, Forward-Looking Statements This presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties. Forward-looking statements describe further expectations, plans, results or strategies. Actual results may differ materially from those stated in any forwardlooking statements based on a number of factors, including the risk factors disclosed in our most recent annual report or Form 20-F and other filings with the Securities and Exchange Commission. Delhaize Group assumes no obligation to update the information contained in this presentation. 2

2 Agenda Financial Results 2009 Stéfan Descheemaeker, Chief Financial Officer Strategy Update Pierre-Olivier Beckers, President and Chief Executive Officer Available for Questions Guy Elewaut, SVP Strategy and External Communications Geert Verellen, Vice President Investor Relations and External Communications Financial Results Stéfan Descheemaeker, Chief Financial Officer 4

3 2009 Financial Highlights +2.6%* revenue growth - U.S.: +0.7% revenue growth (excl. 53 rd week in 2008) - Belgium: +4.7% revenue growth - Greece: +10.2% revenue growth - Rest of World: +27.3% revenue growth - Added 59 stores for a total of at the end of 2009 Operating profit growth of +4.6%, above our 1%- 4% guidance range** +10.6% net profit from continuing operations growth ** +15.7% group share in net profit growth ** Excellent free cash flow generation of EUR 511 million* * At identical exchange rates and excl. 53 rd week in 2008 ** At identical exchange rates, excluding the 53 rd week in 2008 and excluding the restructuring, store closing and impairment charge during the 4 th quarter of Continued Positive Revenue Growth in Uncertain Times and Despite Deflation (YoY at Identical Exchange Rates) 5.5% 3.9% 4.3% 4.9% 4.1% 2.6% 2004* * 2009** * Adjusted for 53 rd revenues week in the U.S. in 2003 and 2008 ** Adjusted for 53 rd revenues week in the U.S. in Actual revenue growth excluding this adjustment amounted to 1.2% at identical exchange rates. Note: 2004 under Belgian GAAP; under IFRS 6

4 U.S. Volume Trends Improvement Hidden by Recent Deflation Delhaize U.S. Comparable Store Sales Growth (YoY) Internal Food Inflation 3.8% 2.7% 2.5% 6.1% 6.5% 1.1% 4.3% 4.3% 4.1% 1.5% -0.4% -1.1% -2.1% Q Q Q Q Q Q Q Q Accelerated Revenue Growth at Delhaize Belgium Delhaize Belgium Comparable Store Sales Growth (YoY) 2.8% 1.6% 2.2% 2.7% -1.1%

5 Continued Double-Digit Revenue Growth in Our Newer Markets Greece Revenue Growth (YoY %) Romania and Indonesia* 13.5% 13.9% 13.8% 20.9% 21.8% 10.2% 16.1% 15.5% 4.0% * 2009 *Super Indo in Indonesia for 51% 9 Resilient Comparable Store Sales Compared to our Local Competitors Delhaize Belgium 1.7% 1.9% 4.6% 2.6% Kroger 3.4% 3.0% 1.7% 1.6% Stop & Shop 4.8% 3.4% 0.7% -0.4% Wal-Mart 3.6% -1.5% -0.5% -2.0% Carrefour Belgium -4.6% -1.0% -3.9% -2.1% Harris Teeter 0.09% -1.4% -2.4% -2.4% Publix -2.8% -2.6% -4.7% -2.5% Delhaize U.S. Winn-Dixie A&P Comparable Store Sales Growth Q1 Q CSS* Growth 2009 Q1 Q2 Q3 Q4 Supervalu 2.0% 0.2% -1.3% -1.2% 0.2% 1.6% -3.3% -3.2% -1.3% -1.5% -3.6% -4.8% -2.8% -2.9% Safeway -0.7% -1.5% -3.0% -4.1% -5.8% -6.5% 10 *CSS = Comparable Store Sales n.a. = not available yet

6 Continued Resilient Operating Margin Operating Margin 4.9% 4.9% 4.9% 4.9% 4.7% * 4.7% 4.3% 2003* * Adjusted for 53 rd sales week in the U.S. in 2003 and Strong Cash Flow and Balance Sheet Free Cash Flow (in millions EUR) Net Debt to Equity Ratio 108% % 82% 74% % 57% % * 2005* * Not adjusted for reclassification of German operations to discontinued 12

7 Q Financial Highlights At identical exchange rates Revenue growth of +1.5% excluding 53 rd week in the U.S. in 2008 Outstanding underlying operating margin of 5.4%* (6.2% for the U.S. operations) and operating profit growth of 10.3%* Net profit from continuing operations: +16.8%* In December 2009, we announced our New Game Plan, a comprehensive strategic plan to accelerate the transformation of our Group to a best-in-class retailer. * At identical exchange rates, excluding the 53 rd week in 2008 and excluding the restructuring, store closing and impairment charge during the 4 th quarter of Per Share Information 2009 (in EUR) At Actual Exchange Rates At Identical Exchange Rates Net Profit (Group share): Basic Diluted % +10.8% +5.4% +6.6% Gross dividend* Net dividend* % +8.1% * Dividend proposed by the Board of Directors to the Shareholders Meeting of May 27,

8 Net Dividend Delhaize Group 1.8 1,33 1,63* 1.6 1,63 1, ,15 1,20 0,92 1,12 1, ,08 0,99 1 0,84 0,9 0, EUR USD Average annual evolution USD/EUR ,4% -9,1% - -0,9% -8,4% -6,8% +5,4% Payout Ratio (Group share in net profit - %): 33.2% 35.5% 31.4% 36.4% 35.2% 31.9% 31.4% 15 *EUR1 = USD 1,3557, Exchange rate of March 9, 2010 Financial Outlook 2010 Delhaize Group Operating profit growth of 7 to 10% (2-5% excluding the U.S. restructuring, store closing and impairment charges in 2009) Capital expenditures of approximately EUR 800 million Add net 120 to 130 stores to the network and remodel approximately 100 stores Reviewing next steps after achieving the 90% shareholding threshold in Alfa Beta 16

9 2010 Strategy Update Pierre-Olivier Beckers, President and Chief Executive Officer 17 Strong Building Platform Consistent Strategy Over Time and Across Geographies Focus on supermarkets Strong brands Well developed private brand programs Focused geographic choices and commitments Innovation leader in assortments, services, concepts and formats 18

10 Strong Building Platform Leading Multi-Brand Retailer in All of our Key Markets United States: - Food Lion: #1 in six Southeastern and Mid-Atlantic markets - Hannaford: # 1 in 2 New England markets - Sweetbay: #3 in fast-growing Western Florida Belgium: - Delhaize: #1 Greece: - Alfa Beta: #2 Romania: - Mega Image: #1 in Bucharest Indonesia: - Super Indo: #2 in Jakarta 19 Strong Building Platform Operating Margin Continues to Be Among the Best Operating Margin 2009 or % 5.9% 5.4% 4.9% 4.7% 4.5% 3.2% 3.2% 3.0% 1.4% Colruyt* Wal-Mart Tesco* Ahold Delhaize Group Casino Carrefour Metro* Sainsbury* Kroger * Concerns 2008 fiscal year results 20

11 External Challenging Environment Financial Environment Remains Challenging U.S. Home Prices % Unemployment U.S % % 3.9 % 6.1 % 5.7 % 5.4 % 5.1 % 4.5 % 4.7 % 6.2 % 2 0 Source: Bureau of Labor Statistics Jan-00 May-00 Sep-00 Jan-01 May-01 Sep-01 Jan-02 May-02 Sep-02 Jan-03 May-03 Sep-03 Jan-04 May-04 Sep-04 Jan-05 May-05 Sep-05 Jan-06 May-06 Sep-06 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 U.S. Mortgage Foreclosures % Unemployment Europe 9.6 % Jul-09 May-09 Mar-09 Jan-09 Nov-08 Sep-08 Jul-08 May-08 Mar-08 Jan-08 Nov-07 Sep-07 Jul-07 May-07 Mar-07 Jan-07 Nov-06 Sep-06 Jul-06 May-06 Mar-06 Jan-06 Source: Eurostat 21 External Challenging Environment Consumers Continue to Increase their Personal Savings Categories Share of total savings Area of savings Savings in leisure and entertainment The party is over Restraints in domestic discretionary spending Especially out-of-home dining, alcohol and tobacco Reductions in the budget for e.g., vacationing and electronics - - Savings on primary goods Savings on essentials Plans on fixed costs Savings on primary goods / services such as grocery Primarily reductions in water-gas-electricity, communications, car - - SOURCE: McKinsey "Grand Angle Consummations", n6,

12 Delhaize Group s Strategic Commitment To accelerate the transformation of the Company into one of the best-in-class retailers worldwide as characterized by: Very competitive pricing in all markets Superior top-line growth Superior operational profit growth performance Create a more effective platform to be a successful acquirer 23 Challenging Environment Requires New Comprehensive Approach Short-term Initiatives Long-term Strategy Generate Profitable Revenue Growth Solid Revenue and Operating Profit Growth Pursue Bestin-Class Execution Operate as a Responsible Company 24

13 What is Our New Game Plan? 25 New Game Plan Breakthrough Themes Operate as a Group Accelerate Growth Enabled by and Funded by Share and live one common vision and values across Delhaize Group Even greater emphasis on price competitiveness leading to value leadership Maximize share of wallet within our 4 walls through innovation and new assortments Be an industry leader in health and wellness for consumers and associates Be a leader in Corporate Responsibility initiatives Our low cost supermarket formats and our newer markets (Greece, Romania and Indonesia) as additional drivers to accelerate organic store growth Excellence in associate development Executional excellence - from independent operating companies to one Group supporting strong banners through shared knowledge and services 26

14 Operate as a Group: Vision and Values Determination Integrity Courage Humility Humour 27 Accelerate Growth Value Leadership Private Brand Assortment Optimization Health & Wellness Corporate Responsibility Network Expansion 28

15 Accelerate Growth: Value Leadership Focus clearly on the price leader in all our local markets Use more detailed pricing comparison to define critical items, key value items, foreground items and background items, Focus more on value line private brands and Enhanced communication supporting price investments Use cost savings to finance price investments Romania, 2005 Greece, 2007 Belgium, 2008 Indonesia, 2006 Sweetbay, 2007 Hannaford, 2009 In 2010, price investments at all our banners 29 Accelerate Growth Value Leadership Private Brand Assortment Optimization Health & Wellness Corporate Responsibility Network Expansion 30

16 Accelerate Growth: Comprehensive Private Brand Offering Premium Core Economy/ Value Natural & Organic Health & Beauty Non-food Accelerate Growth Value Leadership Private Brand Assortment Optimization Health & Wellness Corporate Responsibility Network Expansion 32

17 Accelerate Growth Value Leadership Private Brand Assortment Optimization Health & Wellness Corporate Responsibility Network Expansion 33 Accelerate Growth Value Leadership Private Brand Assortment Optimization Health & Wellness Corporate Responsibility Network Expansion 34

18 Accelerate Growth: Corporate Responsibility Products People Planet LEED stores Green in our stores Leadership in Energy and Environmental Design (LEED), a certification from the U.S. Green Building Council (USGBC) New environment-friendly stores: - Hannaford in Maine in July Sweetbay in Tampa Bay in November Food Lion in South Carolina early Alfa Beta in Athens in April 2010 Energy savings - Electricity savings - Green refrigeration system Reduced water use Energy reduction Delhaize Belgium: Goal to reduce energy consumption by 35% by 2020 relative to 2005 Key levers: Installation of fridge doors Efficient lighting systems Recycling of heat released by refrigerator Solar panels Achievement: -6.3% energy reduction relative to Accelerate Growth Value Leadership Private Brand Assortment Optimization Health & Wellness Corporate Responsibility Network Expansion 36

19 Accelerate Growth: Continued Network Expansion Plans for 2010: store openings expected U.S.: gross (37 in 09) Belgium: gross (43 in 09) Greece: gross (23 in 09) Romania and Indonesia: gross (15 in 09) Store Openings Delhaize Group (excluding store closings, gross)* e * Store openings and store acquisitions, excluding store closings and company acquisitions (Harveys, Victory, Cash Fresh, Plus Hellas, La Fourmi) e: estimated 37 Accelerate Growth: In Newer Operations 250 Number of store openings in newer operations** Greece Romania 50 85* Indonesia * Excluding acquisitions **Newer Operations: New Markets (Greece, Romania, Indonesia) and New Formats (Red Market, Bottom Dollar Food), excl. acquisitions 38

20 Accelerate Growth: While Keeping the Momentum in M & A Greece 2009 Acquisition of 11 Koryfi supermarkets and 1 distribution center Romania 2009 Acquisition of 4 Prodas supermarkets in Bucharest Belgium 2009 Delhaize Belgium divests the 4 German stores 2009 Acquisition of minority shares of Alfa Beta to almost 90% 39 Enabled by: Excellence in Associate Development Through Strong culture and strong values Strong commitment to training and development 63% of our associates received performance reviews 80% of our management vacancies were filled through internal appointments almost half of our associates participated in a specific training program Strong commitment to associate health Hannaford won the "Best Employers for Healthy Lifestyle Awards" - Hannaford managed to keep health expenses for associates and the company down while offering more health programs Delhaize Belgium was named "Partner of Excellence Organization - Smoking cessation program (started 2006): more than 20% of participants quit smoking - Cardiovascular risk screening and advice (started 2006): helped more than 10% of participants Mega Image in top 100 companies to work for 40

21 Funded by: Best-in-Class Execution Cost savings are necessary to fund price investments and other sales building initiatives Respectable track record when it comes to cost optimization: 2008: EUR 60 million 2009: EUR 100 million Planned additional SG&A savings of EUR 300 million annually by Funded by: Best-in-Class Execution (1) Stand alone operating company initiatives All Opco s Store labor productivity Advertising efficiencies Transportation efficiencies Excel in Belgium Accelerate Comparable Store Sales Growth Store Network Renewal and Expansion (net increases) Reductions in supplies and repairs Continued investments to optimize supply chain networks (investments DC) Shelf-ready-packaging Improve Price Perception Reduce Costs and Increase Efficiencies Support Gross Margin 42

22 Funded by: Best-in-Class Execution (2) Shared services benefits at a regional/global level Standardized IT services in Europe and in the U.S. Delhaize Group joined AMS, a multi-retailer organization for sourcing and synergies on a pan- European level: common approach to sourcing for private brands U.S. supply chain master network, total 10-year benefit $334M NPV (project started November 2008) New umbrella organization for all activities of Delhaize Group in the United States. 43 Funded by: Best-in-Class Execution Creates a more powerful organizational structure by which each Delhaize America banner can compete and realize its strategic objectives Pierre-Olivier Beckers CEO Delhaize America Ron Hodge CEO Operations Rick Anicetti CEO Shared Services Hannaford Banner Sweetbay Banner Supply Chain Bottom Dollar Food Banner Food Lion Family Banners Strategy & Research SHARED SERVICES FUNCTIONS NON-SHARED SERVICES FUNCTIONS MANAGED BY INDIVIDUAL BANNERS category management, merchandising, pricing, retail operations, retail support, site analysis, marketing, advertising 44

23 Conclusion: Accelerate Momentum Through Our New Game Plan Leading Market Positions Strong Brands Experienced Management Teams and Excellent Workforce Resilient Financial Performance The New Game Plan Accelerate Momentum Through our New Game Plan 45 Non-GAAP Financial Measures Certain non-gaap financial measures are provided throughout this presentation. We do not represent these measures as alternative measures to net earnings, or other measures determined in accordance with IFRS. These measures as reported by Delhaize Group might differ from similarly titled measures by other companies. We believe that these measures are important indicators of our business and are widely used by investors, analysts and other parties. A reconciliation of these measures to IFRS measures can be found on the Delhaize Group website: 46

24 Appendices 47 Number of Stores 2010e United States Belgium (1) Greece Romania Indonesia Delhaize Group (1)Including 40 stores in the Grand-Duchy of Luxembourg and the 4 stores in Germany that have been sold in the third quarter of

25 Revenues In Millions /2008, Incl. 53 rd week in the U.S. 2009/2008, Excl. 53 rd week in the U.S. United States USD % +0.7% United States EUR % +6.2% Belgium EUR % +4.7% Greece EUR % +10.2% Rest of the World (1) EUR % +15.5% Delhaize Group EUR % +6.2% (1) Mega Image (Romania) and 51% of Super Indo (Indonesia). 49 Margins Gross Margin SG&A % Sales Operating Margin United States 27.9% 27.7% 22.4% 22.2% 5.4% 5.5% Belgium 20.0% 19.3% 16.7% 16.4% 4.0% 3.8% Greece 23.8% 22.7% 20.2% 20.0% 4.0% 3.4% Rest of the World (1) 20.5% 20.0% 21.0% 18.6% -0.3% 1.5% Delhaize Group 25.7% 25.3% 21.0% 20.8% 4.7% 4.8% (1) Mega Image (Romania) and 51% of Super Indo (Indonesia). 50

26 Operating Profit In Millions % Change United States USD % United States EUR % Belgium EUR % Greece EUR % Rest of the World (1) EUR (1) % Corporate EUR (30) (31) +5.4% Delhaize Group EUR % (1) Mega Image (Romania) and 51% of Super Indo (Indonesia). 51