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Ahold Delhaize Annual Report 2016
Dear reader,
It is with great satisfaction and pride that I
look back on 2016. It was the year we became
Ahold Delhaize: a top 10 retail family with
more than 20 strong local brands brought to
life for customers by hundreds of thousands of
dedicated associates. We are an international
retailer with an omni-channel offering
centered on our leading supermarkets and
eCommerce businesses.
We’re in a time of unprecedented change in
our industry. Our challenge today is not only
to adapt to rapid developments taking place
but also to predict them and lead the way.
To do this, we continue to look both externally,
tracking trends and staying close to our
customers, as well as across our businesses,
to understand how we can share innovations
from one brand to the next. We know that
people in all our markets seek connection -
in a modern way - and we, as food retailers,
need to find relevant ways to maintain a bond
with shoppers in stores, online and everywhere
in between.
Customers want convenience and they want it
across channels, as well as in the products they
buy. They don’t want to compromise it even as
they increasingly care about the health benefits
and origins of the food they eat. Our brands
are responding.
In 2016, our great local brands achieved
a strong performance, increasing sales,
operating income and margins for the full year.
Pro forma net sales increased 3.4% at constant
exchange rates and adjusted for the 53rd
week of 2015, to €62.3 billion, driven primarily
by the customer-focused strategies, smart
promotions, and sharp store management in
the Netherlands, Delhaize America and Central
and Southeastern Europe. We were able to
grow market share in most of our markets.
Our successful “save to invest” programs
continued to make it possible for our businesses
to reinvest in our customer proposition, resulting
in stronger net promoter scores, and improve
the overall pro forma underlying operating
margin compared to 2015.
Our strong free cash flow of €1.4 billion enabled
us to keep funding growth in our key channels
- supermarkets, eCommerce and smaller
formats - and return excess liquidity to our
shareholders. We have a strong balance sheet
and we are pleased to propose a dividend
of €0.57 to our shareholders, an increase of
9.6% compared to last year’s Ahold dividend.
This proposed dividend represents a payout
ratio of 48% of pro forma underlying income
from continuing operations.
We kicked off our new company with great
energy, thanks to the relentless drive of
our teams. They maintained the business
momentum and enabled our brands to
continue innovating and doing better,
for customers, for each other, and for the
communities they serve.