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Ordinary and Extraordinary General Meeting
Brussels, May 24, 2012
| 1
Results and accomplishments 2011
Count Georges Jacobs de Hagen Chairman of the Board of Directors of Delhaize Group
| 2
Tough economic climate in most of our regions
| 4
The New Game Plan as point of focus
| 5
Accelerate profitable revenue growth
4.9% 4.1%
2.6%
1.0%
4.6%
2007 2008* 2009** 2010 2011
Including Delta Maxi
Revenue growth YoY at identical exchange rates
* Adjusted for 53rd revenues week in the U.S. in 2008 ** Adjusted for 53rd revenues week in the U.S. in 2008. Actual revenue growth excluding this adjustment amounted to 1.2% at identical exchange rates.
+2.4%
U.S. comparable store sales impacted by increased competition
Delhaize U.S. – Revenue growth (in local currency) and Comparable store sales evolution (YoY)
| 6
Increased competitive activity and lower consumer spending in Q4 2011
200 repositioned FOOD LION stores :
significant outperformance vs
rest of the network and positive volume growth since launch
Bottom Dollar Food stores in
Philadelphia : excellent revenue growth
-0.3%
1.6% 1.9%
-0.4%
0.1%
4.3% 3.5%
1.0%
Q1 2011 Q2 2011 Q3 2011 Q4 2011
Comparable store sales growth Revenue growth
| 7
0.0% 0.0%
-0.4%
-1.5%
0.9% 1.7%
0.2% 0.9%
Q1 2011 Q2 2011 Q3 2011 Q4 2011
Comparable store sales growth Revenue growth
2011 revenue growth mostly coming from proximity and convenience stores
Comparable store sales evolution of -0.6% for 2011, impacted by challenging economic and competitive climate
Delhaize Belgium - Revenue growth and Comparable store sales evolution (YoY)
Delhaize Belgium comparable store sales suffered from challenging climate
Full year: Revenue growth of +0.9% Comparable store sales growth of -0.6%
Southeastern Europe outpaces the Group’s growth
| 8
Proportion of Delhaize Group revenues and operating profit coming from Southeastern Europe
Revenue growth (YoY)
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
2007 2008 2009 2010 2011
SEE Revenue Growth DG Revenue Growth
Excluding impairment charge at Delhaize U.S. in 2011
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
2006 2007 2008 2009 2010 2011
Proportion of DG revenues coming from Southeastern Europe
Proportion of DG operating profit coming from Southeastern Europe
Rapid store expansion in SEE & Asia
| 9
237
304 333
368
445
2007 2008 2009 2010 2011
New store evolution in SEE & Asia segment, excluding the 492 Maxi stores
+87.8%
4.7% 4.4% 4.8%
6.0%
4.4% 4.1% 4.4% 4.8%
Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011
Group underlying operating margin impacted by soft revenues in the U.S. and costs related to our growth initiatives
Underlying operating margin Delhaize Group
Full year 2010: 5.0%
| 10
Full year 2011: 4.4%
Cost savings are re-invested in the business
| 11
Offset cost increases
Price decreases
Fund strategic initiatives
EUR 500 million
gross annual savings target to be
exceeded by the end of
2012 SG&A savings
-Increased labor efficiency -Savings in repair and maintenance -Energy reduction initiatives -Efficiency improvements in stores
Cost of sales savings
Use Source
Net dividend Delhaize Group
| 12
2004 2005 2006 2007 2008 2009 2010 2011
-9.1% - -0.9% -8.4% -6.8% +5.4% +5.2% -4.8%
Average annual evolution USD/EUR
Payout Ratio (Group share in net profit - %) 35.5% 31.4% 36.4% 35.2% 31.9% 31.4% 30.4% 37.8%
(*) Converted at rate of May 23, 2012
0.84 0.90 0.99 1.08 1.11 1.20 1.29 1.32
1.12 1.15 1.33
1.63 1.56 1.47
1.88 1.66
2004 2005 2006 2007 2008 2009 2010 2011*
EUR USD
New Board member
| 13
Shari Ballard New independent Board member Top executive at Best Buy, a USD 50 billion U.S.
electronic retailer - President, Best Buy International Enterprise and
Executive Vice President - Former Co-President of the Americas - Former Executive Vice President, Retail Channel
Management
Board of Directors – mandate renewal
| 14
Pierre-Olivier Beckers
Didier Smits
Claire Babrowski
Remuneration Report
| 15
| 16
Welcome Mats Jansson
| 17
New Chairman - Member of Delhaize Group Board since 2011 - Former President of ICA Detaljhandel and Deputy
CEO and Chairman of ICA Group - President and CEO of Scandinavian Airlines SAS
(2006 to 2010) - CEO of Axfood (2000 to 2005)
Thank you Bob!
| 18
Robert J. Murray - Board Member since 2001 - Former Board Member of Hannaford - Chairman Delhaize Group Audit Committee from 2001 until 2010 - Former EVP North Atlantic Group Gillette
| 19
Strategy update
| 20
Pierre-Olivier Beckers President and Chief Executive Officer Delhaize Group
Thank you Georges!
| 21
Count Jacobs de Hagen - Board Member since 2003 - Chairman Delhaize Group from 2005 until 2012 - Former President of the Executive Committee and former chairman of UCB - Former President of BusinessEurope - Former Management Committee Member and
Honorary Chairman of the Federation of Belgian Companies
| 22
Strengthen brand equity
Accelerate organic growth in newer
operations
External growth through strategic acquisitions
Climate change
Associate health, well being and development
Healthy eating, food safety and responsible
sourcing
On track to exceed our stated gross annual cost savings target of EUR 500 million target by the end of 2012.
Staying focused on the New Game Plan...
Own go-to market strategy
Delhaize America as powerful platform
Common procurement
| 23
Common supply chain
Shared services back office
Own go-to market strategy
Own go-to market strategy
Own go-to market strategy
Food Lion brand repositioning delivering promising results
May 4, 2011 PHASE ONE
PHASE TWO
| 24
FOLLOWING PHASES
2012
-1.8%
0.3% 0.8% 2.1%
4.0%
Q1 2011 Q2 2011 Q3 201 Q4 2011 Q1 2012
Number of transactions* - Raleigh market
* On a comparable store sales basis
New Food Lion brand strategy work implemented
in early May 2011
200 stores
Comparable Store Sales growth in Q1: +2.9%
Outperformed the rest
of the network by 5%
250 stores 260 stores
2012 PHASE THREE
Real growth in Q1: +1.8%
Outperformed the rest
of the network by 8%
| 25
Food Lion repositioning lays solid foundation under future growth
Price decreases will have a short term impact on operating
margins but...
...will lead to higher customer loyalty...
...which will lead to sustainable revenue
growth...
...and an increase in total profit from
operations.
People are lining up for opening new Bottom Dollar Food stores
| 26
Pittsburgh 14 new stores opened since start of 2012 and plans to
open more
| 27
Bottom Dollar Food expands in high-potential markets
- approximately 6,500 items
- 18,000 square feet
-“no-frills” shopping
environment
- national and private brands
that matter most to customers
- cheapest price positioning
in the market
Philadelphia 35 stores currently in the greater Philadelphia area and plans to open more
Building on the historical strengths of Delhaize Belgium
Expert in Food, variety and service…
…while continuing to improve our price competitiveness
Further improve price competitiveness across the group in 2012
| 29
Hannaford launched lower prices in the second quarter
Committed to further improve our price positioning throughout our Group in 2012
Alfa Beta prices back at 2008 levels
Mega Image launched new price campaign « And small prices, and close to home »
Prices in free fall at Maxi
Restored relationship with local suppliers
Improved in-store conditions – eliminated stock outs
Strengthened management team to ensure alignment
Internal and external alignment on brands
Clarified store format strategy Opportunities in private
brands Refined pricing strategy in line with New Game Plan
Maxi – first steps taken since acquisition resulting in growth numbers
| 30
Leading to positive volume growth and 3.8% comparable store sales growth in the first quarter of 2012 in Serbia
Growing stronger in rough water
| 31
Drive sales momentum and
create sales leverage
Invest in innovation and lower
prices
Generate cost
savings
Safeguard New Game Plan priorities through step up of cost savings and capital efficiencies
On track to exceed target of EUR 500 million gross annual savings by the end of 2012 through additional cost
savings opportunities
| 32
Increase free cash flow generation by revising investment plans for
2012 and improving working capital
EUR 700 – 750 million expected capital expenditures for 2012
Closing of 126 underperforming stores in low density areas
| 33
Portfolio optimization: focus on profitable growth
3 main objectives:
• Optimise our capital allocation
• Simplify the way we do business
• Additional resources to reinvest in our business
• Annual positive impact on operating profit of EUR 35 to 40 million
| 34
Our values
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