- On a two-year comparable sales growth basis**, Q4 comparable
sales excluding gas increased 16.0% in the U.S. and 11.6% in
Europe, accelerating versus Q3 in both segments
- Q4 Group net sales were €20.1 billion, up 0.1% at constant
exchange rates compared to Q4 of 2020, which contained a 53rd week.
Excluding last year's 53rd week, Q4 net sales grew by 6.7% at
constant rates. Full year 2021 Group net sales of €75.6 billion
were up 3.3% over 2020 at constant exchange rates, and up 5.0% on a
comparable 52-week basis
- In Q4, net consumer online sales grew 13.2% at constant
exchange rates. 2021 net consumer online sales grew 38.2% at
constant exchange rates
- In 2021, we invested €364 million in COVID-19 care, including a
commitment of €20 million in additional charitable donations spread
evenly between the U.S. and Europe. In total, our brands
contributed over €199 million in monetary value to charitable
initiatives in 2021
- Q4 underlying operating margin was 4.2%, flat year-over-year at
constant exchange rates. 2021 underlying operating margin was
4.4%
- Q4 diluted underlying EPS was €0.59, an increase of 7.6% at
constant currency rates versus the prior year. 2021 diluted
underlying EPS was €2.19, down 3.4% or down 0.5% at constant
currency rates. Q4 IFRS-reported operating income was €895 million;
Q4 IFRS-reported diluted EPS was €0.62, and 2021 IFRS-reported
diluted EPS was €2.17
- Strong 2021 free cash flow generation of €2.2 billion was used
to pay a $190 million (~€170 million) pension liability in the U.S.
following 2020 U.S. MEP withdrawals, ahead of schedule, and fund
the Company's decision to pay approximately €380 million related to
a disputed tax claim, resulting in €1.6 billion reported free cash
flow for 2021
- We propose a cash dividend of €0.95 for fiscal 2021, which is a
5.6% increase compared to 2020
- 2022 outlook: underlying operating margin to be at least 4%;
underlying EPS to decline by low- to mid-single-digits vs. 2021;
free cash flow of approximately €1.7 billion; net capital
expenditures of €2.5 billion
** Two-year comparable sales growth is a stack of the comparable
sales growth excluding gasoline in the current year period added to
the comparable sales growth excluding gasoline in the prior year
period. This measure may be helpful in improving the understanding
of trends in periods that are affected by variations in prior-year
growth rates.
Zaandam, the Netherlands, February 16, 2022 – Ahold Delhaize,
one of the world’s largest food retail groups and a leader in both
supermarkets and e-commerce, reports fourth quarter results
today.
The summary report for the fourth quarter 2021 can be viewed and
downloaded at www.aholddelhaize.com.
Summary of key financial data
|
Ahold Delhaize Group |
The United States |
Europe |
Ahold Delhaize Group |
The United States |
Europe |
€ million, except per share data |
Q4 2021 |
% changeconstantrates |
Q4 2021 |
% changeconstantrates |
Q4 2021 |
% changeconstantrates |
2021 |
% changeconstantrates |
2021 |
% changeconstantrates |
2021 |
% changeconstantrates |
(13 weeks 2021 vs. 14 weeks 2020) |
(52 weeks 2021 vs. 53 weeks 2020) |
Net sales |
20,148 |
0.1 % |
12,099 |
1.5 % |
8,049 |
(1.9) % |
75,601 |
3.3 % |
45,455 |
3.6 % |
30,147 |
2.8 % |
Comparable sales growth excl. gas |
3.2 % |
|
4.8 % |
|
1.0 % |
|
2.3 % |
|
1.9 % |
|
2.8 % |
|
Online sales |
2,176 |
14.7 % |
863 |
30.5 % |
1,314 |
6.3 % |
7,704 |
40.1 % |
3,228 |
68.9 % |
4,477 |
25.1 % |
Net
consumer online sales |
2,981 |
13.2 % |
863 |
30.5 % |
2,118 |
7.4 % |
10,401 |
38.2 % |
3,228 |
68.9 % |
7,173 |
27.9 % |
Operating income |
895 |
NM1 |
662 |
NM1 |
251 |
(47.9) % |
3,320 |
62.2 % |
2,231 |
147.4 % |
1,209 |
(12.6) % |
Operating margin |
4.4 % |
4.6 pts |
5.5 % |
9.2 pts |
3.1 % |
(2.8) pts |
4.4 % |
1.6 pts |
4.9 % |
2.8 pts |
4.0 % |
(0.7) pts |
Underlying operating income |
838 |
1.0 % |
528 |
14.3 % |
334 |
(20.2) % |
3,331 |
(4.5) % |
2,150 |
(8.8) % |
1,306 |
(1.5) % |
Underlying operating margin |
4.2 % |
— pts |
4.4 % |
0.5 pts |
4.1 % |
(1.0) pts |
4.4 % |
(0.4) pts |
4.7 % |
(0.6) pts |
4.3 % |
(0.2) pts |
Diluted EPS |
0.62 |
NM1 |
|
|
|
|
2.17 |
79.0 % |
|
|
|
|
Diluted underlying EPS |
0.59 |
7.6 % |
|
|
|
|
2.19 |
(0.5) % |
|
|
|
|
Free
cash flow |
379 |
56.4 % |
|
|
|
|
1,618 |
(21.8) % |
|
|
|
|
1. Not meaningful, as Q4 2020 Group operating income at constant
rates and operating income in the U.S. were losses, and diluted EPS
was negative in Q4 2020.
Comments from Frans Muller, President and CEO of
Ahold Delhaize
"We ended 2021 on a strong note, with positive Group Q4
comparable sales momentum and stable Group margins, positioning us
for a strong start to the next phase of our Leading Together
strategy announced last November. Looking back on the past year, I
am most proud of how associates brought our values to life in the
way they responded to ongoing developments associated with COVID-19
and natural disasters throughout our brands' markets, including
major floods in Belgium, tornadoes in the Czech Republic, fires in
Greece and Hurricane Ida in the U.S. Through it all, associates
rose to the challenge to care for customers and communities. As a
result, we enter 2022 with deeper relationships and trust across
our brands' markets and stronger market shares to build upon.
"For the full year, our COVID-19 care investments totaled €364
million, which included our commitment of €20 million in additional
2021 charitable donations spread evenly between the U.S. and
Europe. In total, our brands, combined, contributed over €199
million in monetary value to charitable initiatives across the
globe in 2021. The pandemic has shown us the importance of
maintaining food and product supplies to local communities – a
vital role that we remain focused on fulfilling, together with our
brands and suppliers.
"Our financial results in 2021 significantly exceeded our
original expectations, with positive full-year comparable sales
growth and stable 52-week comparable underlying earnings compared
to record results in 2020. This was despite supply chain
challenges, increasing inflationary pressures and the dilutive
effect as we continue to rapidly expand our omnichannel
proposition. Our investment in our omnichannel platform once again
proved its worth during 2021, with Group net consumer online sales
growing by more than 38% compared to 2020, representing a two-year
stack growth of more than 105%. This positively impacted our 2021
Group net sales, which, at €75.6 billion, remained elevated – up
3.3% versus 2020 at constant rates.
"In Q4, we maintained the momentum built throughout 2021, and
produced Group two-year comparable sales stack growth of 14.2%,
accelerating from the 12.2% growth achieved during Q3.
"In the Netherlands, we successfully converted all 38 stores
acquired from DEEN to the Albert Heijn banner during the quarter.
The converted stores are performing well and contributing to Albert
Heijn's strong market share gains, which were leading among Dutch
food retailers during 2021. In 2022, the brand is committed to
building on its recent expansion into new channels, with its Albert
Heijn to go format scheduled to open at an additional 18 BP fueling
stations, following the introduction at 86 locations in late 2021.
Its new online subscription program – Albert Heijn Premium –
launched in Q4 and is also off to a strong start, with well over
300,000 subscribers through February.
"To advance its omnichannel offerings in the U.S., Giant Food
launched online marketplace solution Ship2me, initially offering
around 40,000 additional general merchandise and food items. Our
U.S. brands also added new click-and-collect locations in Q4, for a
total addition of 270 in 2021.
"As we enter 2022, we will accelerate our omnichannel
investments to capture the incremental growth opportunities we see
over the horizon, enabled by our platform. Improving omnichannel
productivity also remains a very high priority as part of the
commitment we announced at our November Investor Day to reach fully
allocated profitability in Group e-commerce operations by 2025. It
comes as the global COVID-19 pandemic continues to highlight the
importance of strong omnichannel food retail operations that offer
consumers a variety of shopping options, including robust online
offerings.
"In this respect, we are proud of The GIANT Company's new
e-commerce fulfillment center that opened in the Philadelphia
market in Q4. It is supporting our growth and productivity
ambitions for 2022 and beyond. We continue to invest across our
entire distribution network and build new digital capabilities.
"This will be particularly visible at bol.com, where we will
more than double investments in 2022 as we begin a phase of
significant investment in the brand. As we announced at Investor
Day, we increased Group capex guidance to ~3.5% of sales for the
period 2022 until 2025. Excluding bol.com, our grocery business
capex guidance will continue at prior averages ~3%. These
additional investments will ensure momentum at bol.com remains
strong, and will be funded, amongst other means, by the strong
projected free cash flow generation of the grocery business of at
least €7 billion for the period 2022-2025.
"In 2021, despite decreasing tailwinds from the COVID-19
pandemic, bol.com net sales increased 21% to €2.8 billion, with net
consumer online sales growing 27% to €5.5 billion, fueled by our
growing merchant partner network, which now stands at around
49,000. Profitability was also strong, with underlying EBITDA of
€166 million keeping pace with the prior year. IFRS-reported
operating income was €95 million. The investments we plan in 2022
will kick start a multi-year phase of investment to put the
infrastructure in place to match the volume growth we expect in the
coming years and build out highly accretive service capabilities in
advertising and logistics. We are excited about this chapter in
bol.com's evolution and continue to progress on our plans to get
bol.com ready for a sub-IPO during the second half of 2022.
"On a final note, during Q4, we were pleased to have earned an
upgrade to our MSCI ESG ranking to 'AA' from our previous 'A'
ranking. We also maintained our standing as a leader in the Dow
Jones Sustainability Index. Our score of 83 out of 100 was well
above the industry average 26 points and placed us highest among
food retailers in Europe and the U.S.. We expressed our intention
to make continued progress on the ESG front through our decision in
Q4 to pull forward our commitment to reach net-zero carbon
emissions across our brands by no later than 2040. And we will
actively apply this lens as we invest in our future. For example,
at bol.com, we recently reached an agreement to acquire a majority
stake in Cycloon, a green and social delivery expert, which will
help support bol.com's growth ambitions and sustainability efforts.
As we double down on our efforts to support the transformation of
our industry into a healthy and sustainable ecosystem, I look
forward to keeping you updated on our progress throughout the
year."
Q4 Financial highlights
Group highlights
Group net sales were €20.1 billion, up 0.1% at constant exchange
rates, and increased 2.8% at actual exchange rates. Excluding last
year's 53rd week, Q4 Group net sales grew by 6.7% at constant
exchange rates. Group net sales were driven by positive
contributions from comparable sales growth excluding gasoline of
3.2%, acquisitions, and foreign currency translation benefits,
which were partially offset by a 53rd week in 2020. Q4 Group
comparable sales had a net negative impact of approximately 0.1
percentage points, from unfavorable weather impacts, which were
partially offset by favorable calendar shifts.
On a two-year comparable sales stack basis, growth for the Group
of 14.2% in Q4 2021 compares to the 12.2% growth posted in Q3.
In Q4, Group net consumer online sales grew 13.2% at constant
exchange rates versus a 14-week quarter in 2020, due to continued
growth at bol.com and the overall online grocery business. Q4 Group
net consumer online sales also benefited from the FreshDirect
acquisition. On a 13-week comparable basis, Q4 Group net consumer
online sales grew 21.5% at constant exchange rates, which builds on
top of 71.7% growth in Q4 2020.
In Q4, Group underlying operating margin was 4.2%, flat compared
to the prior year at constant exchange rates, as sales leverage and
strong cost-saving initiatives offset higher supply chain costs and
inflationary cost pressures. In Q4, Group IFRS-reported operating
income was €895 million, representing an IFRS-reported
operating margin of 4.4%.
Underlying income from continuing operations was
€598 million, up 6.7% in the quarter at actual rates. Ahold
Delhaize's IFRS-reported net income in the quarter was €634
million. Diluted EPS was €0.62 and diluted underlying EPS was
€0.59, up 10.2% at actual currency rates compared to last year's
results. In the quarter, 9.9 million own shares were purchased
for €299 million, bringing the total amount for the full year
to €1 billion.
2021 diluted underlying EPS of €2.19 increased 28.8% over the
2019 base, and significantly exceeded the Company's original
guidance of mid- to high-single-digit growth versus 2019. This
upside compared with the original guidance came from strong
food-at-home demand and better than expected Group underlying
operating margins of 4.4%, compared to original guidance of "at
least 4%." This drove strong cash generation, with the Company's
€1.6 billion reported free cash flow including payments of
$190
million
(~€170 million) for U.S. pensions following 2020 U.S. MEP
withdrawals and approximately €380 million related to a disputed
Belgian tax claim. Excluding these two items, 2021 free cash flow
would have amounted to €2.2 billion.
U.S. highlights
U.S. net sales increased by 1.5% at constant exchange rates
(5.9% at actual exchange rates). Excluding last year's 53rd week,
Q4 U.S. net sales grew by 9.2% at constant exchange rates. U.S.
comparable sales excluding gasoline increased 4.8%. Unfavorable
weather negatively impacted Q4 U.S. comparable sales by
approximately 0.2 percentage points. On a two-year comparable sales
stack basis, growth was 16.0%, accelerating from the 15.3% growth
in Q3. Brand performance continued to be led by Food Lion, which
has now delivered 37 consecutive quarters of positive sales
growth.
In Q4, online sales in the segment were up 30.5% in constant
currency, driven by the continued expansion of click-and-collect
facilities and the FreshDirect acquisition. Excluding the
FreshDirect acquisition, U.S. online sales grew 7.5% in constant
currency, building on top of the significant 128.5% growth in the
same quarter last year.
Underlying operating margin in the U.S. was 4.4%, up 0.5
percentage points at constant exchange rates from the prior year
period, driven by reduced COVID-19-related costs and strong
cost-savings initiatives. While the absence of one-time costs in
the prior year quarter were offset by lapping last year's extra
week, Q4 U.S. underlying operating margins benefited by 0.3
percentage points from a favorable reserve release. In Q4, U.S.
IFRS-reported operating margin was 5.5%.
Europe highlights
European net sales declined by 1.9% at constant exchange rates
and 1.5% at actual exchange rates, driven by a 53rd week in 2020.
Excluding last year's 53rd week, Q4 net sales in Europe grew by
3.0% at constant exchange rates. Europe's comparable sales
excluding gasoline grew 1.0%. Despite lapping strong comparable
sales growth excluding gasoline in Q4 2020 of 10.6%, comparable
sales were able to grow year-over-year on the back of continued
market share gains. Albert Heijn was a particular standout in the
quarter, with positive market share results driven by strong
execution, successful marketing campaigns, sales uplifts provided
by the brand’s store remodeling activities and the acquired DEEN
stores.
A calendar shift positively impacted Q4 comparable sales in
Europe by approximately 0.1 percentage points. On a two-year
comparable sales stack basis for Q4 2021, growth was 11.6%, an
acceleration compared to growth of 7.3% in Q3 2021.
In Q4, net consumer online sales in the segment were up 7.4%,
following 73.4% growth in the same period last year. At bol.com,
our online retail platform in the Benelux, net consumer sales grew
by 7.8% in Q4 (15.3% on a comparable 13-week basis), which comes on
top of nearly 70% growth in the same quarter last year. Bol.com's
sales from third-party sellers grew 9.1% in the quarter (17.2% on a
comparable 13-week basis) representing 56% of net consumer sales,
with nearly 49,000 merchant partners on the platform.
Underlying operating margin in Europe was 4.1%. This compares to
an underlying operating margin of 5.1% in the prior year quarter
when margins sustained unusual benefits from lockdown conditions in
Europe. In Q4, Europe's IFRS-reported operating margin was
3.1%.
Outlook
Management remains confident in the Company's ability to grow
sales in 2022, as originally indicated during the November Investor
Day. Strong sales are expected to result from current trends in
consumer behavior favoring more food-at-home consumption and online
food purchases, which fit well with Ahold Delhaize's omnichannel
business model and growth investments.
While supply chain disruptions, inflation and rising costs as
well as the expected easing of government subsidies to consumers
pose challenges for the industry in 2022, Ahold Delhaize's Group
underlying operating margin is expected to be at least 4.0%, in
line with the Company's historical profile. Management believes
that the Company's brands continue to offer consumers a strong
shopping proposition and are well positioned to maintain
profitability in the current inflationary environment. Margins are
expected to be supported by a strong Save for Our Customers target
of above €850 million. This should help offset cost pressures
related to inflation and supply chain issues, along with the
negative impact to margins from increased online sales penetration.
The 2022 target builds on €967 million of savings from 2021, which
significantly exceeded original guidance forecasting savings of
over €750 million.
Underlying EPS is expected to decline by low- to
mid-single-digits versus 2021, driven primarily by a return to
historical margin levels in 2022 compared with elevated 2021
levels.
Free cash flow is expected to be approximately €1.7 billion. Net
capital expenditures are expected to total around €2.5 billion,
reflecting a step up in the Company's investments in its digital
and omnichannel offering to support accelerated sales growth. In
addition, Ahold Delhaize remains committed to its dividend policy
and share buyback program in 2022, as previously stated. We expect
to grow the full-year dividend in 2022 to €0.95 per share, and have
previously announced a €1 billion share repurchase program for
2022.
|
Full-year outlook |
|
Underlying operating margin |
Underlying EPS |
Save for Our Customers |
|
Net capital expenditures |
Free cash flow1 |
|
Dividend payout ratio2.3 |
Share buyback3 |
Outlook |
2022 |
|
At least 4% |
decline by low- to mid- single digits vs.
2021 |
>€850 million |
|
~ €2.5 billion |
~ €1.7 billion |
|
40-50% payout;YOY growth in dividend per
share |
€1 billion |
1. Excludes M&A2. Calculated as a percentage of underlying
income from continuing operations.3. Management remains committed
to the share buyback and dividend program, but, given the
uncertainty caused by COVID-19, will continue to monitor
macroeconomic developments. The program is also subject to changes
in corporate activities, such as material M&A activity.
- Ahold Delhaize Q4 2021 Press release
- Ahold Delhaize Q4 2021 Summary report
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