Group financial review continued
0.9?
Overview
Business review Governance
Financials
Investors
Ahold Delhaize Annual Report 2016
Ahold USA on a pro forma basis
(5)
(0.6)%
(0.1)%
1 At constant exchange rates, pro forma net sales for 2016 increased by 2.5%, when compared to pro forma net sales
adjusted for week 53 sales in 2015.
2 Excluding gas sales, pro forma net sales for 2016 increased by 3.3%, at constant exchange rates and adjusted for week 53
in 2015.
In 2016, pro forma net sales were
€23,316 million, up by 0.9% or €210 million
compared to 2015. At constant exchange
rates, pro forma net sales were up by 0.5%.
Pro forma net sales growth was affected by
lower gasoline sales, primarily due to a decline in
gasoline prices. Comparable gasoline volumes
were down by 2.8%. Excluding gasoline, pro
forma net sales at constant rates were 1.3%
higher than in 2015, or, adjusted for week 53 in
2015, higher by 3.3%. This increase was mainly
driven by 0.7% growth in comparable sales
and the full-year impact of the conversion
of 25 acquired A&P stores in Q4 2015 (which
contributed 2.7% to sales growth in 2016).
Sales growth was adversely impacted by
overall market deflation in main product
categories. This was most notable in the
second half of the year and in the Meat and
Dairy categories.
During 2016, Ahold USA completed the
transformation of the produce and self-service
bakery departments. These transformations,
and two waves of price reduction at the end of
Q1 and Q3, were part of its program to improve
the customer proposition through targeted
price reductions and marketing, an improved
“Fresh” offering, and an enhanced customer
experience through in-store merchandising
and employee engagement. Stores where the
program has been rolled out continued to see
positive performance.
12
2
Our online business, Peapod, continued to
grow in its existing market area and has
further expanded in the New York City area
as additional capacity became available at
its New Jersey facility.
Pro forma operating income decreased by
€5 million, or 0.6%, to €854 million compared
to 2015. Underlying operating income is
adjusted for the following items, which
impacted operating income:
Impairments: The 2016 impairment
charges amounted to €32 million and
in 2015 impairment charges amounted
to €20 million. The impairments in 2016
related primarily to underperforming stores
and investment properties. In 2015 these
primarily related to underperforming stores.
(Gains) Losses on the sale of assets: No
individually significant gains or losses were
recorded in 2016 or 2015.
Restructuring and related charges and
other items: The 2016 charges decreased by
€10 million compared to 2015. In 2016, these
charges mainly related to integration costs
as result of the merger (€33 million). In 2015,
charges included a restructuring of the
Ahold USA support office in 2015 (affecting
operating income negatively by €14 million),
an early retirement incentive offered to
Giant Landover store employees with an
impact of €17 million and €11 million charge
from the withdrawal from a multi-employer
pension plan.
Ahold USA’s pro forma underlying operating
income margin in 2016 was 4.0%, flat
compared to 2015.
In a highly competitive landscape, market
share was up, mainly driven by the New
York Metro division and its acquisition of
25 A&P stores.
In 2016, pro forma underlying operating
income was €921 million, down by €1 million
compared to last year. At constant rates,
pro forma underlying operating income
decreased by 0.5%.
32
(8)
20
(10)
1.1%
859
million
Net sales1,2
Comparable sales growth
excluding gasoline
Operating income
Adjusted for:
Impairments
(Gains) losses on the sale of assets
Restructuring and related charges
and other items
Underlying operating income
Underlying operating income margin
Underlying EBITDA margin
(10)
(1)
2015
(53 weeks)
23,106
53
922
4.0%
6.8
Change versus
prior year
210
change
2016
(52 weeks)
23,316
43
921
4.0%
6.8%
0.7%
854
56
