Non-GAAP measures
This Annual Report includes the
following non-GAAP financial
measures:
Overview
Business review Governance
Financials
Investors
Ahold Delhaize Annual Report 2016
Adjusted income from continuing operations
Income from continuing operations
adjusted for significant non-recurring items.
This measure was a component of the 2015
dividend policy, which set the dividend payout
ratio to be 40-50% of adjusted income from
continuing operations.
Sales adjusted for week 53 in 2015
Net sales in full year 2015 minus net sales of
former Ahold segments in the 53rd week of
2015. Ahold Delhaize’s management believes
that this measure provides an insight into the
impact of the additional week when net sales
are compared to the previous year.
Comparable sales
Comparable sales are net sales, in local
currency, from exactly the same stores and
online sales in existing market areas for the
most recent comparable period plus net
sales from stores that are replaced within
the same market area. For markets that sell
gasoline, Ahold Delhaize also calculates
the comparable sales, excluding gasoline
sales, to eliminate gasoline price volatility
in the comparison.
Comparable sales and comparable sales
excluding gasoline sales are not reflected
in Ahold Delhaize’s financial statements.
However, the Company believes that disclosing
comparable sales and comparable sales
excluding gasoline sales provides additional
useful analytical information to investors
regarding the operating performance of
Ahold Delhaize as it neutralizes the impact
of, for example, newly acquired stores in the
calculation of sales growth.
Earnings before interest, taxes, depreciation
and amortization, or EBITDA
Ahold Delhaize defines EBITDA as operating
income (loss) plus depreciation and
amortization. EBITDA is considered to be
a useful measure for investors to analyze
profitability by eliminating the effects
of financing (i.e., net financial expense),
capital investments and the impact of the
purchase price allocation (i.e., depreciation
and amortization).
Free cash flow
Ahold Delhaize defines free cash flow
as operating cash flows from continuing
operations minus net capital expenditures
and net interest paid plus dividends received.
Ahold Delhaize has included free cash flow as
the Company believes it is a useful measure for
investors, because it provides insight into the
cash flows available to, among other things,
reduce debt and pay dividends. Free cash
flow is derived from the financial statements;
however, this is not a measure calculated
in accordance with IFRS and may not be
comparable to similar measures presented by
other companies. Accordingly, free cash flow
should not be considered as an alternative to
operating cash flow.
Net consumer online sales
Total online sales to customers, excluding sales
taxes and value-added taxes, but including
sales of third parties via bol.com’s Plaza.
Ahold Delhaize’s management believes that
this measure provides more insight into the
growth of our online businesses.
Global Support Office (previously Corporate
Center) costs
Global Support Office costs relate to the
responsibilities of the Global Support
Office, including Finance, Strategy, Mergers
Acquisitions, Internal Audit, Legal
Compliance, Human Resources, Information
Technology, Insurance, Tax, Treasury,
Communications, Investor Relations, Corporate
Responsibility, and the majority of the
Executive Committee. Global Support Office
costs also include results from other activities
coordinated centrally but not allocated to any
subsidiary. Underlying Global Support Office
costs exclude impairments of non-current
assets, gains and losses on the sale of assets,
and restructuring and related charges and
other items, including business acquisition
transaction costs.
Gross rent
Gross rent comprises all of the rent that Ahold
Delhaize is required to pay to third parties
and is not corrected for rental income Ahold
Delhaize receives from other third parties.
Net sales at constant exchange rates
Net sales at constant exchange rates exclude
the impact of using different currency
exchange rates to translate the financial
information of Ahold Delhaize subsidiaries
or joint ventures to euros. Ahold Delhaize’s
management believes this measure provides a
better insight into the operating performance
of Ahold Delhaize’s foreign subsidiaries or
joint ventures.
Net sales in local currency
In certain instances, net sales are presented in
local currency. Ahold Delhaize’s management
believes this measure provides a better insight
into the operating performance of Ahold
Delhaize’s foreign subsidiaries.
Net debt
Net debt is the difference between (i) the sum
of loans, finance lease liabilities, cumulative
preferred financing shares and short-term
debt (i.e., gross debt) and (ii) cash, cash
equivalents, current portion of available-for-
sale financial assets, and short-term deposits
and similar instruments. In management’s
view, because cash, cash equivalents,
current portion of available-for-sale financial
assets, and short-term deposits and similar
instruments can be used, among other things,
to repay indebtedness, netting this against
gross debt is a useful measure for investors
to judge Ahold Delhaize’s leverage. Net debt
may include certain cash items that are not
readily available for repaying debt.
