Delta Maxi: a strategic
acquisition that improves
the Group's growth profile
I
Ops
FOCUS
2011 will without any doubt be bookmarked as the year in which
Delhaize Group took an important step towards changing its
growth profile. With the acquisition of Delta Maxi in Southeastern
Europe the needle of the portfolio made a significant move towards
its newer and faster growing operations.
GROWTH
IN NEWER
OPERATIONS
Strategic objectives
Growth platform
*'AS"
12 DELHAIZE GROUP ANNUAL REPORT '11
Growing faster in
newer operations is
one of the key ele
ments of the New
Game Plan. In 2011
Delhaize Group stayed
well on track to deliver
on its promises. Since
the announcement
of the strategic plan,
we opened 60% of
our new stores in our
newer markets. Last
year, we accelerated
our development
in Romania where
we opened no less
than 33 new stores,
increasing the network
by 45%. In Indonesia
the network expanded
by almost 22%.
Delhaize Group closed the
acquisition of Delta Maxi in
July 2011. The acquisition pro
vided Delhaize Group with
immediate scale in the Bal
kans, an area that is home to
approximately 55 million con
sumers, and a presence in five
new countries, including Serbia, where Delta
Maxi enjoyed a strong position.
Given that Delhaize Group had not closed a
large transaction since acquiring Hannaford in
2000, the group has been very focused on mak
ing sure Delta Maxi would achieve a number
of strategic objectives. First, the Maxi portfolio
of approximately 485 stores at the time of the
acquisition is expected to generate approxi
mately EUR 1.3 billion in revenues in 2012. Sec
ondly, the density of the Maxi network results
in an immediate strong position in the new
markets. In addition, the acquisition was a per
fect complement to the existing operations in
Greece and Romania and establishes Delhaize
Group as one of the leading food retailers in
Southeastern Europe. While new markets can
often provide challenges, we feel the poten
tial risks are largely mitigated given the Maxi
countries are adjacent to these markets. This
regional scale provides a number of operating
benefits and opportunities to leverage the cost
structure. Furthermore, the establishment of
Delhaize Europe organization will provide the
Maxi operations with access to the Groups' best
practices. We are confident that Maxi's multi for
mat approach will add value to the Group.
In addition to the benefits mentioned above,
an exciting element of the Maxi story relates
to growth. We entered geographies that are
expected to grow in the modern grocery sec
tor by approximately 20% through 2014. In fact,
approximately 60% percent of our new store
openings planned for 2012 will occur in South
eastern Europe. We have previously described
our plan to rebalance our portfolio or increase
our presence in growth markets and this trans
action certainly contributes to the goal. Finally,
as we consider potential growth opportunities,
our position in Southeastern
Europe provides us with a
strong platform from which
to grow organically or
through targeted acquisi
tions.
Discover more information on
www.delhaizegroup.com
