Achievements of the Delhaize 'The Lion' group in 1998:
- The number of sales outlets increased by 88 to a total of 1,904.
- Sales rose by 2.4 % to BEF 520.9 billion (EUR 12.9 billion). Adjusted for non-recurrent events, sales increased by 8.5 %.
- Consolidated cash flow from operations (EBITDA) amounted to BEF 35 billion (EUR 868 million), up by 7.8 %.
- Consolidated net current earnings, Group share, increased by 25.4 % to 6.3 billion (EUR 156.7 million). Per share, this represented BEF 122 (EUR 3,02).
- Consolidated net earnings, Group share, amounted to BEF 6 billion (EUR 149 million), a growth of 21.8 %.
- Consolidated net current earnings, Group share, per share rose by 25.1 % to BEF 122 (EUR 3.02).
The main achievements in 1998 of the operating companies were :
- Increase by 22 % of net earnings of Food Lion, non-recurring events excluded.
- Sales growth of 5.2% (taxes included) for Delhaize 'Le Lion' Belgium.
- Reconversion of the P.G. group supermarkets in France to the trading names 'Stoc' and 'Marché Plus'
- Successful expansion of Alfa-Beta in Greece.
- Opening of 16 supermarkets by Delvita, including the first one in Slovakia.
- Reinforcement of the presence of Bel-Thai Supermarket (Thailand) and Lion Super Indo (Indonesia).
Dividend
At the Shareholders’ General Meeting on May 27, 1999, the Board of Directors will propose the distribution of a dividend, net of withholding tax, of EUR 0.84 (BEF 33.9), an increase by 13 %. This dividend will be payable upon presentation of coupon n° 37 as of June 11, 1999.
DELHAIZE 'THE LION' GROUP
Number of stores:
In 1998, the Delhaize 'The Lion' group continued to grow on all its markets. At the end of 1998, the Group operated 1,904 stores, that is
88 more than at the end of 1997. By opening a first supermarket in Bratislava (Slovakia), the Delhaize 'The Lion' group entered a ninth country.
Results:
The Delhaize 'The Lion' group achieved in 1998 sales (taxes excluded) of BEF 520.9 billion (EUR 12.9 billion), or a 2.4 % increase compared to 1997. At unchanged exchange rates, the increase amounted to 1.5 %. Non-recurrent events excluded such as the closing of 61 stores in Texas during the fourth quarter of 1997, sales of the Group grew by 8.5 %.
The consolidated cash flow from operations (EBITDA) increased in 1998 to BEF 35 billion (EUR 868 million) compared to BEF 32.5 billion (EUR 805 million) in 1997, or a 7.8 % increase. Depreciation amounted to BEF 11.9 billion (EUR 295 million). The cash flow margin grew in 1998 from 6.4 % to 6.7 %.
The consolidated net current earnings, Group share, increased by 25.4 % to BEF 6.3 billion (EUR 157 million). At unchanged exchange rates, the rise was 24.1 %.
Taking the depreciation of goodwill and exceptional earnings into account, the consolidated net profit, Group share, amounted to BEF 6 billion (EUR 149 millions), or 21.8 % more than the BEF 5 billion (EUR 125 millions) achieved in 1997. At unchanged exchange rates, the increase in profit was 20.5 %.
The consolidated net current profit, Group share, per share,
increased to BEF 122 (EUR 3.02) in 1998 compared to BEF 97.5
(EUR 2.42) in 1997, that is a 25.1 % increase. The net profit per share, Group
share, raised by 21.5 % to BEF 115.9 (EUR 2.87).
Balance sheet:
The Delhaize 'The Lion' group is supported by a sound
financial structure. At the end of 1998, equity, minority interests included, amounted to
38.4 % of the total balance sheet compared to 35 % the previous year. The net
debt decreased from BEF 47.3 billion (EUR 1.2 billion) to
BEF 36.1 billion (EUR 894 million). The ratio 'net debt to
equity' decreased from 75 % at the end of 1997 to 51 % at the end of 1998.
Capital expenditures:
In 1998, the Delhaize 'The Lion' group invested BEF 23.7 billion (EUR 588 million) compared to BEF 20.8 billion
(EUR 515 million) in 1997. The breakdown of the capital expenditures was as
follows : Food Lion, BEF 18.4 billion; Super Discount Markets, BEF 179
million; Delhaize 'Le Lion' S.A., BEF 2.2 billion; Alfa-Beta,
BEF 675 million; Delvita, BEF 1.6 billion; P.G. group, BEF 160 million; Others, BEF 558 million.
Employment:
At the end of 1998, the Delhaize 'The Lion' group employed 118,942 people, or 11,622 more than the previous year. In Belgium, the Delhaize 'The Lion' group created, in 1998, 253 new jobs and employed 13,349 people at the end of the year.
OPERATING COMPANIES
United States:
At the end of 1998,
Food Lion, Inc operated 1,207 supermarkets in the
United States. During that year, Food Lion opened 79
supermarkets. 29 stores were re-localised or closed. The net increase in the number of supermarkets was 50 units. 141 supermarkets were renovated and enlarged. In 1998, Food
Lion achieved sales of USD 10.2 billion (BEF 371 billion or EUR 9.2 billion; taxes excluded), which represents a 0.2 % increase. As a result of the aggressive
commercial policy, sales of Food Lion, at an adjusted perimeter, increased by 6.1 % (adjusted for the closure of 61 stores in Texas during the fourth quarter of 1997, the 53
rd
week of operations in 1997 and the new calculation of taxes on sales as of May 1998 on). Same store sales increased by 2.6 % in 1998. The cash flow from operations of Food Lion
amounted to USD 784 million (BEF 28.5 billion or EUR 706 million) compared to USD 712 million (BEF 25.8 billion or EUR 640 million) the previous year, a 10.1 % increase. In 1998, net
earnings increased by 58.3 % to USD 273 million (BEF 9.9 billion or EUR 245 million). Non-recurrent events excluded, net profit increased by 22 %.
In 1998,
Super Discount Markets, Inc in
Atlanta (Georgia) took over and transformed 4 competitor’s supermarkets
into Cub Foods supermarkets, which raised the number of 'Cub Foods' stores to 18. In 1998, Super Discount Markets achieved sales of USD 287 million (BEF 10.4 billion
or EUR 259 million; taxes excluded), that is 8.9% more than in 1997. The cash flow from operations amounted to USD 6.7 million (BEF 240 million or EUR 6
million). A net profit of USD 101,579 (BEF 4 million or EUR 0.1 million) was achieved.
Belgium & Luxembourg:
In 1998,
Delhaize 'Le Lion' opened
in Belgium 2 supermarkets, 16 AD Delhaize, 4 Superettes, 8 Delhaize2 stores, 7 Di
and 13 Tom & Co. Moreover, 9 supermarkets were renovated and enlarged. 1 supermarket and the 45 Dial stores were closed. In 1998, Delhaize 'Le Lion' Belgium achieved
sales of BEF 117 billion (EUR 2.9 billion; taxes included). This growth of 5.2 % was due to the dynamic commercial policy, the opening of newstores and the upturn in consumer
spending in Belgium. The cash flow from operations of Delhaize 'Le Lion' Belgium increased by 19.1 % to BEF 4.2 billion (EUR 103 million). The
profit before shareholding income increased by 15.5 % from BEF 496 million (EUR 12.3 million) to BEF 573 million (EUR 14.2 million).
Europe:
In
Greece,
Alfa-Beta Vassilopoulos extended its network by 11 supermarkets to a total of 42. In 1998, sales increased by 21.9 % to
GRD 135.9 billion (BEF 16.7 billion or EUR 414 million; taxes included). The cash flow from operations increased by 34.1 % to GRD 8.1 billion (BEF 1 billion or EUR 25
million) and net earnings went up 18.9 % to GRD 1.3 billion (BEF 157 million or EUR 4 million).
In 1998,
Delvita opened 16 new supermarkets,
in the Czech and the Slovak Republics, one of which was the first in Slovakia. At the end of
1998, Delvita operated 59 supermarkets. In November 1998, Delvita opened a second distribution centre located in the East of the Czech Republic. In 1998, Delvita registered
a sales increase of 44.8 % to CZK 8.8 billion (BEF 9.9 billion or EUR 246 million; taxes included). The cash flow from operations increased to CZK 393 millions (BEF
442 million or EUR 11 million). Due to the fast expanding capital expenditures, Delvita’s depreciation amounted to CZK 245 million (BEF 276 million or EUR 7 million)
and its financial result was negative to the amount of CZK 246 million (BEF 277 million or EUR 7 million). Delvita closed its financial year 1998 with a negative net result of CZK 87 million (BEF 98 million or EUR 2.4 million).
At the end of 1998, the
P.G. group in
France operated 37 'Stoc' supermarkets and 9 'Marché Plus' affiliates. In
november 1998 the transformation of P.G. supermarkets to 'Stoc' and of P.G. Partenaires affiliates to 'Marché Plus', two trading names of the Comptoirs
Modernes group, was finalised as planned. In 1998, sales (taxes included) amounted to FRF 2.2 billion (BEF 13.4 billion or EUR 332 million). The
cash flow from operations stood at FRF 87.4 million (BEF 538 million or EUR 13 million), net earnings at FRF 31 million (BEF 187 million or EUR 5 million).
Asia:
At the end of 1998,
Bel-Thai Supermarket Co. Ltd. (Thailand) operated 5 supermarkets under the trading name 'Food Lion', that is 3 more than at the end of 1997. The activities of Bel-Thai Supermarket developed positively in 1998.
Lion Super Indo (Indonesia) operated, at the end of 1998, 12 supermarkets compared to 11 supermarkets at the end of 1997. During 1998, the existing
supermarkets were renovated. In 1998, Lion Super Indo reinforced its presence. Following a change in Indonesian legislation, in December 1998, the Delhaize 'The Lion'
group converted a loan into a 51% shareholding in Lion Super Indo, which will then be entirely consolidated in the 1998 Delhaize 'The Lion' group accounts.
In 1998, the result of the activities of the group Delhaize 'The Lion' in Asia was breakeven.
OUTLOOK FOR 1999: NEW GROWTH IN ALL MARKETS
In 1999, the
Delhaize 'The Lion' group expects further growth on all of its markets. Due to an expected net increase in the number of stores of
171 units in 1999, the group will cross the threshold of 2000 stores and end 1999 with 2,075 stores. In 1999, the Delhaize 'The Lion' group will invest BEF 20 billion (EUR 496 million). The group continous to study new take-overs.
United States:
- The expansion of Food Lion will continue with the opening of 80 new supermarkets
and the re-opening of 5 supermarkets that were taken over recently. In 1999, 35 sales
outlets will be re-localised or closed. The number of stores will increase by 50 to reach
1,257. 140 existing stores will be renovated and enlarged. The sales area will increase by
7 % and the same store sales should grow by 2 %. In 1999, Food Lion foresees capital
expenditures of USD 390 million (BEF 13,4 billion or EUR 333 million).
- Super Discount Markets plans to launch the 'Save-A-Lot' trading name, a SuperValu discount concept, and is looking for opportunities to buy stores.
Belgium & Luxembourg:
- Delhaize 'Le Lion' Belgium plans the opening of 2 new supermarkets, 20 AD
Delhaize and Superettes, 2 Delhaize2, 10 Di and 20 Tom & Co. The renovation of
existing stores will continue. In 1999, Delhaize 'Le Lion' will invest BEF 2.4
billion (EUR 60 million) in Belgium.
Europe:
- The P.G. group plans to open 1 supermarket and 5 affiliates as well as to
renovate and enlarge 9 stores.
- Alfa-Beta should open, in 1999, at least 10 new supermarkets. At least 4
supermarkets will be located in Thessaloniki, in northern Greece, a new market for Alfa-Beta.
- Delvita plans to open 10 new supermarkets, several of which in Slovakia. Delvita
should achieve a net profit in 1999. Since the acquisition in March 1999 of 11.5 % of
Delvita, the Delhaize 'The Lion' group controls 100% of this company.
Asia
- In January 1999 the Delhaize 'The Lion' group acquired 49 % of Shop N Save, the third food retailer in Singapore. At the end of 1998, Shop N Save operated
22 supermarkets and in 1999, plans to open 4 additional supermarkets. The Singaporean
group QAF kept 51 % of Shop N Save. The majority shareholder of QAF is the Salim group, the Delhaize 'The Lion' partner in its Indonesian joint-venture Lion Super Indo.
- In 1999, Bel-Thai Supermarket plans to extend its network of stores by 8 units.
- Lion Super Indo plans to open 7 new supermarkets.
Group Results (audited)
| EXCHANGE RATES |
Year end rate (balance sheet) |
Average rate (results) |
| |
31/12/1998 |
31/12/1997 |
31/12/1998 |
31/12/1997 |
| American dollar (USD) |
34.45 |
36.92 |
36.306 |
35.7755 |
| French franc (FRF) |
6.1498 |
6.1655 |
6.1534 |
6.1296 |
| Czech crown (CZK) |
1.15 |
1.07 |
1.1269 |
1.1329 |
| Greek drachma (GRD) |
0.12235 |
0.13065 |
0.122956 |
0.13102 |
| Thai Baht (THB) |
0.9494 |
0.7855 |
0.8994 |
1.1681 |
| Indonesia Rupee (IDR) |
0.00438 |
- |
0.0036 |
- |
GROUP BALANCE SHEET
(after profit appropriation (in millions of BEF) |
31/12/1998 |
31/12/1997 |
| ASSETS |
|
|
| Intangible assets (I+II+III) |
9,714.7 |
11,045.5 |
| Tangible and financial fixed assets (IV+V) |
91,794.4 |
92,274.9 |
| Stocks and receivables (VI+VII+VIII+XI) |
71,433,- |
68,879.1 |
| Treasury (IX+X) |
10,251.9 |
8,843.3 |
| TOTAL ASSETS |
183,194.- |
181,042.8 |
| |
|
|
| LIABILITIES |
|
|
| Equity (I-VIII) |
70,254 |
63,330.5 |
| Provisions for liabilities and deferred taxation (IX) |
6,076.9 |
6,918,- |
| Amounts payable after one year (X) |
36,569.6 |
45,193.5 |
| Amounts falling due within one year (XI+XII) |
70,293.5 |
65,600.8 |
| of which financial liabilities (XI, A+B) |
9,749,- |
10,918.6 |
| TOTAL LIABILITIES |
183,194.- |
181,042.8 |
(audited)
Consolidated and statutory accounts of Delhaize 'The Lion' were certified without reserve by the auditor Deloitte & Touche.
Shareholder’s calendar
- Deadline for the deposit of shares for the shareholders’ General Meeting - 20 May 1999
- Shareholders’ General Meeting - 27 May 1999
- Payment coupon n° 37 (dividend 1998 financial year) - 11 June 1999
- Press release : half year result for 1999 - 2 September 1999
- Press release : 1999 sales - 7 January 2000
- Press release : 1999 results - March 2000
- Deadline for deposit of shares for the shareholders’ General Meeting - 19 May 2000
- Shareholders’ General Meeting - 25 May 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 press release is available in English, French and Dutch. It is also available at the following website address http://corporate.delhaize-le-lion.be