Cash Earnings per Share Increase 7.4% to EUR 3.61
- Sales rise 27.0% to EUR 18.2 billion
- Cash flow from operations up by 30.6% to EUR 1.3 billion
- Cash flow margin 7.0% compared to 6.8% in 1999
- Cash EPS up by 7.4% to EUR 3.61
BRUSSELS, Belgium, March 15, 2001 - Delhaize Group (Euronext Brussels: DELB) reported today that it earned EUR 187.7 million in the fiscal year 2000, before goodwill amortization and exceptional income as compared to EUR 174.7 million in fiscal year 1999. Per outstanding share, cash earnings per share increased by 7.4% to EUR 3.61.
In 2000, Delhaize Group achieved sales of EUR 18.2 billion, an increase of 27.0% compared to 1999, while cash flow from operations (EBITDA) grew by 30.6% to EUR 1.3 billion. This resulted in a cash flow margin of 7.0% of sales compared to 6.8% in 1999.
In fiscal year 2000, net earnings after goodwill amortization and exceptional income of Delhaize Group was EUR 160.7 million, or EUR 3.09 per share compared to a total of EUR 169.9 million or EUR 3.27 per share in 1999. In fiscal year 2000, financial expenses and amortization of goodwill increased significantly due to the Hannaford-acquisition. In addition, Delhaize America posted an exceptional charge for store closings and one-time merger costs related to the Hannaford acquisition, which was mostly offset by the capital gain on the divestiture of P.G.
At the Shareholders' General Meeting to be held on May 23, 2001, the Board of Directors will propose the payment of a dividend, after deduction of withholding tax, of EUR 1.02 (BEF 41.15), a 9.7% increase over 1999.
At the end of 2000, Delhaize Group's worldwide sales network consisted of 2,310 stores, an increase of 198 stores (+ 9.4%). Approximately half of the increase was due to store openings and the other half resulted from acquisitions.
Recent Events and Comments
In November 2000, the Board of Directors of Delhaize Group and Delhaize America agreed on a share exchange pursuant to which each outstanding share of Delhaize America not currently held by Delhaize Group would be exchanged for 0.4 shares of Delhaize Group. The closing for this transaction is expected in Spring 2001. The closing is subject to approval by the shareholders of Delhaize America.
'The upcoming share exchange with Delhaize America is a milestone in the development of our group', says Pierre-Olivier Beckers, President and Chief Executive Officer of Delhaize Group. 'The simplified capital structure and increased liquidity of the stock will increase the attractiveness of Delhaize Group in the financial markets. Also, the creation of a new group management structure will allow us to better align our financial and human resources with the group priorities. Finally, the addition of five new directors to the Board - three of which will be independents - and the creation of audit, compensation and nomination committees, will position Delhaize Group at the forefront of best practices in corporate governance.'
Outlook
2001 will be another year of growth for Delhaize Group:
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Capital expenditures of EUR 620 million are planned. The sales network will grow by 203 stores. |
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Delhaize America will begin to fully benefit from the synergies gained through its acquisition of Hannaford, as the integration continues as planned. Comparable store sales growth of Delhaize America is estimated to be 1-2% for the year 2001. At the same time, Delhaize America intends to further increase operational margins. |
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Building upon its strong increase in operating cash flow of 37.1% in 2000, Delhaize Belgium will continue to focus its attention on reaching the targeted operating cash flow margin of 5.5% at the end of 2001. |
The entry of Delhaize Group into the largest European buying organization, EMD (European Marketing Distribution), will strengthen the purchasing position of Delhaize Europe (Delhaize Belgium, Alfa-Beta, Delvita and Mega-Image). After the entry of Delhaize Group, EMD will be present in 15 European countries and represent a combined purchase volume of EUR 118 billion. EMD has a 14.3% share of the European food retail market.
Fourth Quarter 2000 Net Earnings Rise 6.1% to EUR 66.7 Million
During the fourth quarter of 2000, Delhaize Group grew its sales network by 45 stores due to store openings. In the last quarter of 2000, sales of Delhaize Group totaled EUR 6.2 billion, an increase of 42.2% over the same period in 1999, largely due to the acquisition of Hannaford on July 31, 2000. Cash flow from operations (EBITDA) grew in the fourth quarter of 2000 by 43.7% to EUR 463.5 million, or 7.5% of sales compared to 7.4% in the comparable period in 1999.
Delhaize Group earned EUR 59.5 million in the fourth quarter ending December 31, 2000, before goodwill amortization and exceptional income. Per outstanding share, net current profit was EUR 1.14 compared to EUR 1.23 over the same period in 1999. In the fourth quarter of 2000, net profit after goodwill amortization and exceptional income of Delhaize Group was EUR 66.7 million or EUR 1.28 per share (EUR 1.21 in 1999).
OPERATING COMPANIES
United States
During the fiscal year 2000,
Delhaize America opened 66 new stores, acquired 106 Hannaford supermarkets and relocated or closed 28 stores, resulting in a net increase in its sales network of 144 stores. In addition, Delhaize America remodeled 173 supermarkets.
Delhaize America posted in 2000 sales of USD 12.7 billion (EUR 13.7 billion), an increase by 16.3% over 1999. These results include the sales of Hannaford since the end of July 2000. Comparable store sales rose by 0.8% during 2000. In the fourth quarter of 2000, sales increased by 32.5% to USD 4.5 billion (EUR 5.2 billion) over 1999, while comparable store sales grew by 2.1%.
In 2000, cash flow from operations of Delhaize America amounted to USD 959.5 million (EUR 1,041.1 million), a 10.9% increase. Operating cash flow margin amounted to 7.6%. In the fourth quarter of 2000, cash flow from operations from Delhaize America increased by 26.0% to USD 349.4 million (EUR 402.0 million), resulting in an operating cash flow margin of 7.8%.
In 2000, net profit of USD 155.5 million (EUR 168.7 million) declined from the USD 300.4 million (EUR 282.0 million) achieved in 1999 primarily due to increased financial charges and amortization of USD 87.8 million (EUR 95.3 million) related to the acquisition of Hannaford, and an increase in exceptional charges due to store closings, merger costs and asset impairment charges of USD 60.2 million (EUR 65.3 million)
In the fourth quarter of 2000, Delhaize America posted net earnings of USD 41.5 million (EUR 47.7 million). In the first full quarter after the acquisition of Hannaford, Delhaize America achieved approximately USD 10 million in benefits from synergies with Hannaford. Delhaize America is confident it will achieve the targeted synergies of approximately USD 40 million in the first year of the combined organization, and USD 75 million by year three.
In 2001, Delhaize America expects to open 44 new supermarkets and seven stores will be relocated, resulting in a total store number at the end of 2001 of 1,457 stores, a net increase of 37 outlets. Delhaize America expects to remodel 217 stores during 2001. As a result, total selling area will grow by approximately 4.0 %. In 2001, Delhaize America plans capital expenditures of USD 450 million (EUR 478 million).
In 2000,
Super Discount Markets added one Cub Foods supermarket and nine Save-A-Lot discount stores to its sales network, bringing the total number of stores to 30. Super Discount Markets achieved sales of USD 314.9 million (EUR 341.7 million) and posted a loss of USD 0.6 million (EUR 0.7 million).
Europe
During fiscal year 2000,
Delhaize Belgium enlarged its sales network by 62 stores. Delhaize Belgium posted sales of EUR 3.0 billion, an increase by 6.4% over 1999 resulting from the growth of the sales network and successful sales initiatives in its existing stores. Comparable store sales increased by 3.4%. For the fourth quarter of 2000, sales increased by 6.6% to EUR 800.2 million over the same period in 1999. Market share of Delhaize Belgium increased from 23.5% in 1999 to 24.1% in 2000 (Source: A.C. Nielsen).
In 2000, cash flow from operations of Delhaize Belgium increased by 34.0% to EUR 149.8 million. In the fourth quarter cash flow from operations increased by 21.8%. The operating cash flow margin of Delhaize Belgium increased to 5.0% in 2000 from 4.0% in 1999. In 2000, net profit of Delhaize Belgium grew by 60.0% to EUR 63.2 million.
In 2001, the sales network of Delhaize Belgium will be enlarged by 72 stores. The continued increase in profitability of Delhaize Belgium through the expansion of the affiliates network, gross margin improvements and greater efficiency, should result in the achievement of the operating cash flow margin objective of 5.5% at the end of 2001.
At the end of 2000,
Alfa-Beta (Greece) operated 53 supermarkets, five more than at the end of 1999. In 2000, sales of Alfa-Beta rose by 13.5% to GRD 160.0 billion (EUR 475.3 million). Cash flow from operations of Alfa-Beta increased by 27.0% to GRD 9.7 billion (EUR 28.9 million), or 6.1% of sales. Net profit grew by 55.8% to GRD 2.0 billion (EUR 5.8 million). In the fourth quarter of 2000, cash flow from operations of Alfa-Beta increased by 49.8%, resulting in an operating cash flow margin of 8.6%.
In 2001, the sales network of Alfa-Beta will be more than doubled, merging 54 stores and bringing the total to 107 outlets, making Alfa-Beta the second largest food retailer in Greece. The main driver of the store number increase is the acquisition of Trofo that was completed in January 2001. In 2001, the management of Alfa-Beta will focus on successfully integrating Trofo, which is proceeding as planned.
At the end of 2000,
Delvita (Czech Republic and Slovakia) operated 114 stores, including 99 stores in the Czech Republic and 15 stores in Slovakia. For the fiscal year 2000, Delvita increased sales by 6.6% to CZK 12.2 billion (EUR 344.1 million). In 2000, cash flow from operations of Delvita decreased by 18.4% to CZK 590.6 million (EUR 16.6 million), due to a significant number of competitive store openings. The operating cash flow margin was 4.8%. Delvita closed its 2000 fiscal year with a loss of CZK 74.2 million (EUR 2.1 million).
In 2001, Delvita expects to open approximately four new supermarkets in the Czech Republic and five in Slovakia. Initiatives to strengthen comparable store sales is the priority for the Delvita management for 2001.
At the end of 2000,
Mega-Image (Romania) operated profitably 10 stores, an increase by two since its acquisition by Delhaize Group in May 2000. In 2000, Mega-Image posted sales of ROL 414.2 billion (EUR 20.2 million).
Asia
At the end of 2000, Delhaize Group operated 68 supermarkets in
Asia, including 18 in Thailand, 20 in Indonesia and 30 in Singapore, an increase in 2000 of five, six and five stores, respectively. In 2000, the operations of Delhaize Group in Asia posted sales of EUR 228.7 million, an increase by 38.8% over 1999. In fiscal 2000, cash flow from operations of the Asian activities of Delhaize Group amounted to EUR 1 million compared to EUR 3 million in 1999. In 2001, Delhaize Group expects to increase its sales network in Asia by 28 stores to a total of 96 stores, an increase of 11 in Thailand, 10 in Indonesia and seven in Singapore.
DELHAIZE GROUP
Delhaize Group is a food retailer headquartered in Belgium and listed on Euronext Brussels. At the end of 2000, Delhaize Group's sales network consisted of 2,310 stores in 10 countries on 3 continents. In 2000, Delhaize Group achieved sales of EUR 18.2 billion and a net profit of EUR 160.7 million. Delhaize Group employs 153,000 persons. For more information, visit
www.delhaizegroup.com.
Auditor's approval
The statutory auditor Deloitte & Touche has confirmed that the annual financial information included in the press release does not require any qualification on his part and is in accordance with the annual accounts approved by the Board of Directors.
Shareholders' Agenda
- Press release - 2001 first quarter results April 27, 2001
- Final date for depositing shares for the General Shareholders Meeting May 17, 2001
- General Shareholders Meeting May 23, 2001
- Press release - 2001 second quarter results September 6, 2001
- Press release - 2001 third quarter results October 26, 2001
Investors and Press Contact
Guy Elewaut Tel.: + 32 (0) 2 412 29 48
Geoffroy d'Oultremont Tel.: + 32 (0) 2 412 83 21
Fax: + 32 (0) 2 412 29 76
e-mail:
investor@delhaizegroup.com
This press release is available in English, French and Dutch. You can also find it on the web site
http://www.delhaizegroup.com. More detailed information on the 2000 sales of the operating companies, the sales network and the selling area, is available in the sales press release of January 5, 2001, to be consulted on the web site.
Delhaize Group's Investors' Meeting will be broadcast live over the internet at
http://www.delhaizegroup.com. Click on the button 'Web cast Events' to access and follow the live presentation. It is recommended to have a pre-connectivity test. By clicking on the appropriate button, you will be able to submit simultaneously your written questions to the management. A conference call by telephone, without the possibility of submitting questions, will also be available live by calling +44 20 8781 0596 (European participants) or 303 224 6997 (U.S. participants), with 'Delhaize' as password. The presentation can be downloaded from the web site. An on-demand replay of the web cast will be available shortly after the investors' meeting at
http://www.delhaizegroup.com.
Safe Harbor
'This press release includes forward-looking statements (statements that are not historical facts and relate to future activities and performance) that involve risks and uncertainties. These forward-looking statements include statements about future strategies and the anticipated benefits of these strategies, and they are subject to risks and uncertainties. Actual results may differ materially from those stated in any forward-looking statements based on a number of factors, including the early stage of Delhaize Group's consideration of these strategies, the possibility that Delhaize Group may decide not to implement these strategies, the ability of Delhaize Group to successfully implement any of these strategies if and when Delhaize Group decides to implement them, and the possibility that the anticipated benefits of these strategies are not achieved. Delhaize Group assumes no obligation to update the information contained in this press release.'