At the end of the first half of 1999, net profit before goodwill amortisation (Group share) of the DELHAIZE 'THE LION' GROUP was up by 12.9 % at BEF 3 billion (EUR 75.2 million). Net profit per share rose by 12.4 % to BEF 58.4 (EUR 1.45). Net profit after goodwill amortisation (Group share) amounted to BEF 2.8 billion (EUR 70.6 million). Operating cash flow increased by 5.6 % to BEF 17.1 billion (EUR 423.5 million). Sales (taxes excluded) amounted to BEF 261 billion (EUR 6.5 billion), an improvement of 6.3 % compared with the first six months of 1998. During the first six months of 1999, the DELHAIZE 'THE LION' GROUP extended its sales network with 152 stores to a total of 2,056 outlets in 10 countries at the end of June.
In the first half of 1999, sales (taxes excluded) of FOOD LION (U.S.A) stood at USD 4.9 billion (BEF 182.2 billion or EUR 4.5 billion), a 5.5 % increase. Same stores sales grew by 2.2 %. This increase in sales was achieved through an aggressive sales policy and the important opening program of new stores. Operating cash flow of FOOD LION totalled USD 374.1 million (BEF 13.9 billion or EUR 343.6 million), up by 7.3 %. Net profit of FOOD LION amounted to USD 127 million (BEF 4.7 billion or EUR 116.6 million), a 10.1 % increase. At the end of June 1999, FOOD LION was operating 1,247 supermarkets. During the first half of the year, FOOD LION opened 53 supermarkets and renovated 52 others. During the second half of 1999, FOOD LION plans to open 41 new supermarkets and to renovate 88 existing supermarkets. In August 1999, 51 supermarkets in Florida changed from the trade name 'Food Lion' to 'Kash n' Karry' or 'Save 'n Pack'.
In September 1999, FOOD LION will be renamed in DELHAIZE AMERICA after the transfer of its commercial activities to a new company called FOOD LION. DELHAIZE AMERICA, Inc.
(ex-FOOD LION , Inc.) will, from September 9, 1999, be listed on the New York Stock Exchange and de-listed from NASDAQ. At the same time, 3 shares DELHAIZE AMERICA 'A' or 'B' will be united to 1 share DELHAIZE AMERICA 'A' or 'B' ('reverse stock split').
In August 1999, FOOD LION announced the acquisition of HANNAFORD BROS. for an amount of USD 3.6 billion (BEF 137 billion or EUR 3.4 billion). HANNAFORD BROS. operates 152 supermarkets, most of them located in the North-East of the United States, and had in 1998 sales of USD 3.3 billion (BEF 120 billion or EUR 3 billion) and a net profit of USD 95 million (BEF 3.6 billion or EUR 88 million).
Over the first half of 1999, SUPER DISCOUNT MARKETS (U.S.A.) achieved sales (taxes excluded) of USD 136.5 million (BEF 5.1 billion or EUR 125.4 million), an increase by 8.6 %. Operating cash flow stood at USD 2.8 million (BEF 103 million or EUR 2.6 million). 2 supermarkets were taken over from a competitor and turned into Cub Foods supermarkets, bringing the number of stores under this trade name to 20. SUPER DISCOUNT MARKETS prepares the launch of the 'Save-A-Lot' discount formula.
During the first six months of 1999, DELHAIZE 'LE LION' achieved in Belgium and Grand Duchy of Luxembourg sales (taxes included) of BEF 59.1 billion (EUR 1.5 billion). The increase of 3.6 % in the first half of 1999 is due to the dynamic commercial policy and the opening of new stores, in the first place affiliated stores. Adjusted for the closure of 45 Dial stores, in 1998, sales increase would have been 6.8 %. Operating cash flow was up by 1.6 % to BEF 2.1 billion (EUR 51.6 million). During the first six months, the sales network was extended with 11 AD Delhaize, 1 Superette, 1 Delhaize 2, 6 Di and 8 Tom & Co. In the second half of 1999, DELHAIZE 'LE LION' plans to open 3 supermarkets, 8 AD Delhaize or Superette, 4 Di and 12 Tom & Co.
The dioxin crisis has created uncertainty with the clients and demanded a big effort from our employees and the suppliers. The results of Delhaize 'Le Lion' Belgium were not significantly influenced.
During the first six months of 1999, sales (taxes included) of ALFA-BETA (Greece) were up by 20 % to GRD 71.2 billion (BEF 8.9 billion or EUR 219.8 million) thanks to its commercial dynamism and the expansion of the sales network. Operating cash flow increased by 3.8 % to GRD 3 billion (BEF 376.9 million or EUR 9.3 million). Profit before taxes rose from GRD 413.8 million (BEF 51.5 million or EUR 1.3 million) to GRD 745.5 million (BEF 92.9 million or EUR 2.3 million). During the first half of the year,
ALFA-BETA opened 2 new supermarkets in Thessalonica, a new market for ALFA-BETA. It plans to open 5 new supermarkets during the second half of 1999.
Sales (taxes included) of DELVITA (Czech Republic and Slovakia) totalled CZK 5.5 billion (BEF 6.1 billion or EUR 150.7 million), a rise of 35.9 %. The acquisition of 50 Interkontakt-stores, the opening of 1 new supermarket and the success of the existing supermarkets contributed to this strong growth. Operating cash flow amounted to CZK 347.5 million (BEF 385 million or EUR 9.5 million), a rise of 89.3 %. At the end of June 1999, DELVITA was operating 110 stores, of which 98 in the Czech Republic under the trade names 'Delvita' and 'Sama', and 12 in Slovakia under de trade name 'Delvita'. During the second half of 1999, the sales network will be extended with 1 supermarket. The integration of the Interkontakt-stores proceeds as planned.
During the first half of 1999, the P.G. GROUP (France) achieved sales (taxes included) of FRF 1.1 billion (BEF 6.5 billion or EUR 161.7 million) and an operating cash flow of FRF 45.6 million (BEF 280.2 million or EUR 6.9 million). In the first half of 1999, the P.G. GROUP opened one new store. At the end of June 1999, the P.G. GROUP was operating 37 'Stoc'-supermarkets and 10 'Marché Plus'-affiliated stores. During the second half of 1999, P.G. plans to open 1 supermarket and 5 affiliated stores. Customers react positively to the change of P.G. supermarkets into the trade names 'Stoc' and 'Marché Plus'. The number of customers increases again.
Sales of BEL-THAI SUPERMARKET (Thailand) grew strongly during the first half of 1999. BEL-THAI SUPERMARKET acquired at the end of the first half of 1999 5 supermarkets and an affiliated store of a competitor. During the second half of the year, the opening of 2 new supermarkets is planned. The DELHAIZE 'THE LION' GROUP reached an agreement with The Mall and the Saha Group for the acquisition of their shareholdings in BEL-THAI SUPERMARKET, due to which the shareholding of the DELHAIZE 'THE LION' GROUP in BEL-THAI SUPERMARKET will increase from 45 % to 100 %. In May 1999, FOOD LION (U.S.A.) agreed the acquisition of 51 % of BEL-THAI SUPERMARKET, which will be renamed in FOOD LION THAILAND.
During the first half of 1999, sales of LION SUPER INDO (Indonesia) increased strongly. LION SUPER INDO opened 1 supermarket. During the second half of the year, LION SUPER INDO will extend its sales network with 3 stores to a total of 16 supermarkets.
In January 1999, the DELHAIZE 'THE LION' GROUP acquired 49 % of SHOP N SAVE, the third food retailer in Singapore. During the second half of the year, the opening of 4 new supermarkets is planned to a total of 26 sales outlets.
During the first six months of 1999, the Asian activities of the DELHAIZE 'THE LION' GROUP were slightly profitable.
Global promotion 'More than 2,000 stores'
To underline the crossing of the threshold of 2,000 stores in 1999, the DELHAIZE 'THE LION' GROUP launches in September 1999 a world-wide commercial campaign in food products. The 'More than 2,000 stores'-campaign underlines the innovative capacity as well as the integrated strategy of the DELHAIZE 'THE LION' GROUP.
Outlook
The DELHAIZE 'THE LION' GROUP will continue to expand during the second half of the year 1999, in which the sales network will be extended with 67 stores to a total of 2,123 sales outlets (excluded the 152 supermarkets of HANNAFORD BROS).
Unless unforeseen circumstances or major fluctuations in foreign currency exchange rates, the net profit before goodwill amortisation of the DELHAIZE 'THE LION' GROUP should increase by more than 10 % in the financial year 1999 compared with 1998 thanks to the favourable development of its activities.
Key Figures
Report of the statutory auditors on the half-year accounts
We have conducted a limited review of the half-year account of the DELHAIZE 'THE LION' GROUP as at June 30, 1999. Our limited review did not reveal any significant adjustments, which would be required to be made to the half-year accounts as presented.
Deloitte & Touche Reviseurs d'Entreprises s.c.c.
represented by Mr Claude Pourbaix and Mr James Fulton.
Shareholder's calendar
- Press release 1999 sales : January 7, 2000
- Press release 1999 results : March 16, 2000
- Final date to deposit shares to attend the General Meeting of Shareholders : May 19, 2000
- General Meeting of Shareholders : May 25, 2000
Investors and financial press contact
Guy Elewaut
Tel.: 32.(0)2.412.29.48 or 32.(0)477.50.07.96
Fax: 32.(0)2.412.29.76
This half-yearly press release is available in English, French and Dutch. You can also find it on the website http://corporate.delhaize-le-lion.be
Brussels, September 2, 1999