Company updates integration and financial framework

ZAANDAM, Netherlands — Ahold Delhaize on Wednesday provided institutional investors in London with an update on its Better Together strategy for capturing the benefits of international scale combining with great local brands and associate expertise. Executives used the company’s Capital Markets Day presentation to explain how Ahold Delhaize intends to build on its solid financial foundation and strong track record of cost discipline to drive profitable growth in supermarkets, e-commerce and smaller formats.

The company said it aims to double online sales by 2020. Free cash flow is expected to rise by more than 8% next year from this year’s 1.3 billion euros ($1.4 billion).

Ahold and Delhaize merged in July. The combined company has 6,500 stores around the world. More than half of its annual sales come from the United States, where it owns the Stop & Shop, Giant, Food Lion and Hannaford supermarket chains.

The company reiterated its forecast that the merger will lead to annual savings of 500 million euros ($537 million) in 2019. Ahold suspended its buyback program when it announced the deal last year. Today, the company announced it plans to buy back $1.07 billion worth of shares.

“We are excited to share our Better Together strategy, which builds naturally on our combined strong performance as well as the strong foundations of the local brands in our group,” said Ahold Delhaize chief executive officer Dick Boer. “Guided by this common compass, we will continue to improve our family of brands to be a better place to shop, a better place to work and a better neighbor, every day. We are meeting the needs of customers today and anticipating those of tomorrow by providing more value, quality and convenience. “

The company touted several benefits it expects to realize from the Better Together strategy to integrate the two retailers:

• Captures benefits of international scale to build great local brands.
• Confirms rationale of the merger and sets direction to realize full potential.
• Combined company in full execution mode following merger completion on July 23, 2016.
• Integration on track, with clear visibility to generating $537 million in net synergies in 2019.
• Operating model committed to grow leading supermarket brands while remaining rigorously focused on cost discipline.
• Reflects full commitment to sustainable retailing.