Ahold Delhaize reports higher margins for Q1 2017

Reporting its first quarter 2017 results last week, Zaandam, The Netherlands-based Ahold Delhaize noted that net sales increased 65.1 percent to $20.5 billion while net income increased 72.8 percent to $460 million. The integration of Ahold and Delhaize, which merged in 2016, is on track, with net synergies of $72 million delivered in Q1, according to the company.

In addition, Q1 pro forma underlying operating margin increased to 3.8 percent, compared to 3.6 percent in Q1 2016, Ahold Delhaize reported.

“We are pleased to report a resilient first quarter performance, with an increase in margins for the group despite the ongoing deflationary environment in the United States,” said Ahold Delhaize CEO Dick Boer in a statement. “We continue to make significant progress on the implementation of our ‘Better Together’ strategy, investing in our customer proposition while improving our margins.”

Now 10 months after the merger, “we are fully on track with the integration and we are delivering on our synergy targets,” Boer continued. “We are driving forward our integration programs and continue to focus on sharing best practices across and within regions, as we aim to further strengthen our great local brands to ensure they remain customer-focused, close to their communities and positioned to win in their markets.”

In the United States, continuing deflation, adverse weather and the timing of Easter posed hurdles during Q1. Nevertheless, Ahold Delhaize was able to offset the impact on margins due to the delivery of “strong synergy savings” in the quarter, Boer stated.

The Netherlands reported strong performance. “Albert Heijn continued to improve and renew its product range, both in supermarkets and online,” Boer said. “Bol.com grew its share of Plaza sales, now offering more than 15 million products, and increased its customer base in Belgium.”

To learn more about Ahold Delhaize and its “Better Together” strategy, read the cover article in the Spring 2017 edition of EnsembleIQ’s Private Label International, a sister publication of Store Brands.