Delhaize Group Reports Second Quarter 2010 Results and Raises its 2012 Cost Savings Target From EUR 300 Million to EUR 500 Million
(Thomson Reuters ONE) -
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Financial Highlights Second Quarter 2010 (at identical exchange rates)
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» Stable Group revenues (+4.7% at actual exchange rates)
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» Comparable store sales growth of -3.6% in the U.S. and 5.0% in Belgium
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» Operating margin of 4.2% (4.3% at actual exchange rates); solid operating
margin of 4.8% in Belgium
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» Strong free cash flow generation of EUR 182 million (at actual exchange
rates)
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Financial Highlights First Half 2010 (at identical exchange rates)
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» Revenue growth of 0.8% (+1.2% at actual exchange rates)
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» Operating margin of 4.5% (4.5% at actual exchange rates)
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Other Highlights
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» New Game Plan cost savings are progressing as planned. As a result, we have
identified an additional EUR 200 million cost of sales savings on top of EUR
300 million selling, general and administrative expenses savings announced as
part of the New Game Plan in December 2009 and leading to a total of EUR 500
million in savings by the end of 2012.
» Greek authorities approve full acquisition of Alfa Beta minority shares
» Update operating profit growth guidance to -2% to 2% compared to 2 to 5%
previously (at identical exchange rates and excluding 2009 U.S. restructuring,
store closing and impairment charges)
» CEO Comments
Pierre-Olivier Beckers, President and Chief Executive Officer of Delhaize
Group, commented: "In the second quarter of this year, we were able to maintain
stable revenues for our Group, despite negative inflation resulting from our
structural price investments at Food Lion and persistent difficult trading
conditions in the U.S Southeast. Delhaize Belgium's performance continues to be
outstanding with the highest market share gains of all Belgian retailers this
quarter. In Greece, Alfa Beta continues to gain market share and shows
resilience in a difficult economic environment."
"We continue to make steady progress on the execution of our New Game Plan.
While we are disappointed in our Southeast U.S. sales numbers, we believe they
are not reflective of the underlying strength and the long term growth potential
of the business. We are committed to our strategic price investments started at
the beginning of the year at Food Lion and believe that we have the right value
proposition to respond to the needs of pressured consumers. We are encouraged by
the fact that we have been able to keep selling, general and administrative
expenses in the U.S. flat in nominal terms. Effective initiatives have allowed
us to keep a stable gross margin while our operating margin, even though
impacted by negative sales leverage, stayed at a healthy level."
"In addition, we are not only on track to achieve our EUR 300 million annual
gross cost savings target by the end of 2012, we have now identified an
additional EUR 200 million of gross savings in cost of sales across our Group.
The largest of these initiatives is the creation of a single procurement
organization for Delhaize America, which will combine all our U.S. buying
functions, a natural next step towards becoming a stronger and unified U.S.
entity."
"As a consequence of our commitment to continued price investments, the
lower than expected outlook on U.S. inflation for the rest of the year, and the
persistently difficult and volatile economic and competitive environment we are
facing in the U.S Southeast and and the increasingly tough environment in
Greece, we now expect operating profit growth to range between -2% to 2% at
identical exchange rates for the full year 2010."
» Contacts
Guy Elewaut: + 32 2 412 29 48
Geert Verellen: + 32 2 412 83 62
Aurélie Bultynck: + 32 2 412 83 61
Amy Shue (U.S. investors): +1 704 633 82 50 (ext. 2529)
Barbera Hoppenbrouwers (media): + 32 2 412 86 69
[HUG#1437770]
Press release in pdf format:
http://hugin.info/133961/R/1437770/382501.pdf
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Source: Delhaize Group via Thomson Reuters ONE
Unternehmensinformation / Kurzprofil:
Datum: 13.08.2010 - 08:03 Uhr
Sprache: Deutsch
News-ID 39575
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contact information:
Town:
Brussels
Kategorie:
Business News
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