BELGIUM: Delhaize FY sales rise blighted by charges

By Chris Mercer | 17 January 2013

  • FY sales up 7.7% to EUR22.7bn (US$30bn)
  • Underlying operating profits to drop by 17.5%
  • Charges hit earnings
Delhaizes results were hampered by its comments on profitability and restructuring charges

Delhaize's results were hampered by its comments on profitability and restructuring charges

International food retailer Delhaize has reported a rise in sales for 2012, but charges and lower profits dampened its performance.

Delhaize said in an interim statement today (17 January) that net sales rose by 7.7% in 2012 versus 2011, to EUR22.7bn (US$30bn), driven mainly by Asia, a more favourable Euro-US dollar exchange rate and higher same-store sales at its Food Lion chain.

Momentum slowed in the fourth quarter, with sales up by 2.3% to EUR5.76bn, although the pace of sales growth in Belgium accelerated during this period.

Delhaize's results were hampered by its comments on profitability and restructuring charges. The group said underling operating profits are expected to decline by 17.5% for the year.

The group also reported EUR390m in one-off, pre-tax charges, of which EUR300m will be recognised in the fourth quarter of 2012 and EUR90m in the first quarter of 2013.

In addition, the firm said it will close stores, including 34 Sweetbay stores, and this will result in around EUR130m store closing expenses and related impairments, of which EUR80m will be incurred in 2013.

Show the press release

Delhaize Group 2012 revenues and preliminary results


1/17/2013

  Press Release in PDF.pdf (50.74 KB)

 

 

Fourth Quarter 2012 Revenues (at identical exchange rates)
» Group revenue growth of 0.3%; organic revenue growth of 2.5%
» Positive comparable store sales and volume growth (both transactions and items) at Food Lion
» Flat comparable store sales at Delhaize America and 0.8% comparable store sales growth at Delhaize Belgium
 
Full Year 2012 Results (at identical exchange rates)
» Group revenue growth of 2.9%; organic revenue growth of 2.1%
» Preliminary unaudited underlying operating profit decline of approximately 17.5% compared to 2011
» Free cash flow generation in excess of €600 million
 
Other Highlights
» Approximately €390 million of non-recurring pre-tax charges, of which less than €20 million is an incremental cash charge, and of which approximately €300 million will be recorded in Q4 2012 and approximately €90 million will impact Q1 2013
» Announcing a Capital Markets Day on May 8, 2013
 
 
»CEO Comments
 
Pierre-Olivier Beckers, President and Chief Executive Officer of Delhaize Group said: “We are pleased to announce that organic revenue growth improved during the fourth quarter, in particular as a result of positive volume growth at Delhaize America. Food Lion reported positive volume, transaction and comparable store sales growth for the quarter and recorded its best quarterly performance since 2006.”
 
“As a result of our cost control and capital allocation discipline, in 2012 we generated free cash flow above €600 million, exceeding our previously announced target of €500 million. This strong cash flow performance provides us the means to continue our repositioning efforts, to strengthen our store network and to further deleverage the balance sheet. Our preliminary unaudited underlying operating profit is within the guidance range provided in May 2012.”
 
“Today, we are also announcing goodwill and asset impairment charges, primarily related to our Maxi operations, as well as charges related to store closures, primarily related to Sweetbay. These actions, coupled with the portfolio review announced last year, enhance the health of our store network and create a solid base on which to go forward.”
 
“We remain determined to accelerate the transformation of our business. In 2013, our focus will be on further strengthening our store brands, accelerating revenue growth, maintaining strict cost control and generating free cash flow.”

Original source: http://www.delhaizegroup.com/en/PublicationsCenter/OtherPressReleases/OtherPressReleasesView/tabid/301/Article/1338/delhaize-group-2012-revenues-and-preliminary-results.aspx

Sectors: Retail

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