Group financial review continued
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o
Overview
Business review Governance
Financials
Investors
Ahold Delhaize Annual Report 2016
49,695
38,203
32,682
32,615
32,774
(19)
2015'
2014
20161
(3)
(104)
(39)
1,991
1,646
1,267
1,086
830
2014
2015
2016
1,899
1,461
1,412
1,379
1,267
2015
2016
o
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04
Net sales
million
Underlying operating income
million
Online sales
million
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Gross profit
Ahold Delhaize’s gross profit increased by
€2,935 million, or 28.1% compared to 2015.
At constant exchange rates, gross profit
increased by €2,896 million or 27.6%, which was
€2,713 million higher as a result of the merger
with Delhaize Group. Gross profit margin (gross
profit as a percentage of net sales) for 2016
was 26.9%, a decrease of 0.4 percentage points
compared to 27.3% in 2015.
Gasoline sales have a lower gross profit
margin compared to non-gasoline sales;
therefore the proportionately lower gasoline
sales have a positive effect on the overall
gross profit margin. Excluding the sale of
gasoline, and at constant exchange rates,
gross profit margin was down 0.6 percentage
points. This decrease was almost entirely
driven by the addition of the former Delhaize
Group operations. Delhaize America and
Belgium operate with a lower gross margin
and with lower operating expenses as
percentage of sales.
This decrease of 0.4% is mainly explained
by the addition of the former Delhaize
Group operations in part offset by higher
impairments, integration costs and
restructuring charges. Delhaize America
and Belgium operate with a lower gross
margin and with lower operating expenses
as percentage of sales.
Operating expenses include impairments,
gains (losses) on the sale of assets,
restructuring and related charges and other
items that management believes can distort
an understanding of the trend related to
the development of its underlying business.
Impairments, gains (losses) on the sale of
assets and restructuring and related charges
are summarized as follows:
Impairment of assets
Ahold Delhaize recorded the following
impairments and reversals of impairments
of assets in 2016 and 2015:
Impairment charges in 2016 were €104 million,
up by €65 million compared to 2015.
The impairments in 2016 were primarily related
to remedy stores and other divestments at
Ahold USA (€46 million) and to other store
operations. In 2015, an impairment charge
of €9 million was recorded for a write-down
of prepaid consideration for stores transferred
back to Jumbo (related to the transfer of
stores from Jumbo in 2012). The remaining
impairment charges in 2016 and 2015 mainly
related to underperforming stores.
1*5
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Operating expenses
In 2016, operating expenses increased by
€2,669 million, or 29.2%, to €11,794 million,
compared to €9,125 million in 2015. At constant
exchange rates, operating expenses
increased by €2,636 million or 28.8%, which was
€2,361 million higher as result of the merger
with Delhaize Group. As a percentage of
net sales, operating expenses decreased by
0.2 percentage points to 23.7% compared to
23.9% in 2015. Excluding gasoline sales and at
constant exchange rates, operating expenses
as a percentage of net sales decreased by
0.4%.
in
04
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04
04
2016
w
(2)
(21)
2015
’(2Ö)'
million
Ahold USA
Delhaize America
The Netherlands
Belgium
Central and
Southeastern Europe
Global Support Office
Total
2012 2013 2014
Underlying operating income
Underlying operating margin
2012 2013
Online sales1
Contribution to Ahold Delhaize’s net sales
1During 2012 Ahold acquired bol.com
2012 2013
Net sales
Net sales growth at constant exchange rates1
Sales growth in 2016 and 2015 is adjusted for the impact of week 53.
