Thi hird d Qua uarter er 20 2016 6 Res esul ults November - PowerPoint PPT Presentation

Thi hird d Qua uarter er 20 2016 6 Res esul ults November 17, 2016

2 Third ird Quarte rter r 2016 Resul ults ts Highlights - third quarter 2016 Pro forma net sales increased by 2.6% to € 14.5 billion (up 2.9% at constant exchange rates) • Continued strong online sales growth, with net consumer sales up 25.1% at constant exchange • rates Price pressure from ongoing deflation in the U.S. offset by volume growth • Pro forma underlying EBITDA margin of 6.4% (Q3 2015: 6.3%) • Pro forma underlying operating margin of 3.5% (Q3 2015: 3.5%) • Integration is on track, detailed updates at Capital Markets Day in London on December 7, • 2016

3 Third ird Quarte rter r 2016 Resul ults ts Group performance – pro forma ( € in Millions) Quarter 3 Change Change 2016 2015 actual rates constant rates Net sales es 14,546 14,176 2.6% 2.9% Net sales excl gas 3.3% Under erlyin lying g EBITDA 932 897 3.9% 4.3% Underlying EBITDA margin 6.4% 6.3% Underlyin erlying g operat ating ing income 513 492 4.3% 4.7% Underlying operating margin 3.5% 3.5% Opera ratin ting g income 425 421 1.0% 1.4% Income e from continu nuin ing g operat atio ions ns 264 296 (10.8%) (10.5%)

4 Third ird Quarte rter r 2016 Resul ults ts Performance by segment – pro forma ( € in Millions) Quarter 3 Ahold USA Delhaize America The Netherlands Belgium CSE Change Change Change 2016 2016 2016 Change 2016 Change 2016 constant rates constant rates constant rates Net sales 5,210 2.4% 3,888 1.1% 2,900 4.3% 1,213 1.7% 1,335 8.9% Net sales excl gas 3.4% 1.1% 4.3% 1.7% 9.0% Underlyi rlying EBITDA DA 355 0.3% 256 (1.4%) 196 3.7% 61 22.0% 92 16.5% Underlying EBITDA 6.8% (0.2) 6.6% (0.2) 6.8% 0 5.0% 0.8 6.9% 0.5 margin Underlyin rlying operatin ting g 203 (1.7%) 135 (6.3%) 128 0.8% 24 84.6% 56 27.3% income Underlying operating 3.9% (0.2) 3.5% (0.3) 4.4% (0.2) 2.0% 0.9 4.2% 0.6 margin Compar parable able sales 0.3% (0.3) 1.3% (0.3) 3.3% (1.2) 1.3% (0.6) 6.0% 2.6 growt owth excl gas gas

5 Third ird Quarte rter r 2016 Resul ults ts Ahold USA – pro forma results Q3 2016 Net sales es Compa para rable ble sales es growth h ¹ 14 151 -41 • Net sales grew 3.4% excl gas at -21 constant rates 2.0% 1.9% • Comparable sales affected by 5,087 1.5% 5,211 5,109 deflation of -0.8% 1.1% • Market share improvement 0.6% 0.3% 0.2% driven by NYM market Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q3'15 FX Q3'15 Comp sales New/closed Gas Q3'16 in € constant ex gas stores ¹ Comparable sales growth excl gas rates Under erlyin lying g operat ating ing margin Under erlyin lying g EBITDA A margin 7.0% 7.0% 6.9% 6.8% 6.8% 6.7% 6.6% • Underlying operating margin 4.3% 4.1% 4.0% 4.0% 3.9% 3.9% 3.7% decrease vs. LY due to last year’s timing of Simplicity savings and higher gas margins compared to this year 2 Q1'15 Q2'15 Q3'15 Q4'15* Q1'16 Q2'16 Q3'16 * 2 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 ² Including the 53 rd week in 2015 ² Including the 53 rd week in 2015

6 Third ird Quarte rter r 2016 Resul ults ts Delhaize America – pro forma results Q3 2016 Net sales es Compa para rable ble sales es growth • Net sales grew 1.1% at constant rates • Comparable sales affected by 51 3.2% 3.0% deflation of -1.6% -10 -15 • Continued positive volume 2.2% 2.0% growth at both Food Lion and 1.6% 1.6% 3,847 3,888 1.3% 3,863 Hannaford • 4 th of July calendar impact of -20 bps on comparable sales Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q3'15 FX Q3'15 const Comp sales New/closed Q3'16 in € rates stores Under erlyin lying g operat ating ing margin Under erlyin lying g EBITDA A margin 6.8% 6.6% 6.6% 6.6% 6.5% 6.5% 6.4% • Underlying operating margin decreased vs. LY, caused by 3.8% higher labor expenses and 3.5% 3.4% 3.4% 3.4% 3.3% 3.3% higher pro forma adjustments • Gross margin and shrink improved compared to LY Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q1'15 Q2'15 Q3'15 Q4'15* Q1'16 Q2'16 Q3'16

7 Third ird Quarte rter r 2016 Resul ults ts Netherlands – pro forma results Q3 2016 Net sales es Compa para rable ble sales es growth 4.5% 4.0% 3.5% 3.5% 3.3% 3.2% 31 3.0% 89 • Net sales grew 4.3% 2,900 • Online net consumer sales growth over 30% 2,780 • Inflation of +1.0% Q3'15 Comp sales New/closed Q3'16 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 stores Under erlyin lying g operat ating ing margin Under erlyin lying g EBITDA A margin 7.4% • Underlying operating margin 6.9% 6.8% 6.8% 6.6% 6.6% 6.6% decreased vs. LY, fully caused 5.2% by dilutive impact bol.com in 4.7% 4.6% 4.6% 4.5% 4.4% 4.4% line with plans to accelerate growth • Margin excl bol.com remained flat at 5.1% Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q1'15 Q2'15 Q3'15 Q4'15* Q1'16 Q2'16 Q3'16

8 Third ird Quarte rter r 2016 Resul ults ts Belgium – pro forma results Q3 2016 Net sales es Compa para rable ble sales es growth 5 15 4.0% 3.9% • Net sales grew 1.7% 2.6% • Comparable sales driven by 1.9% 1,213 inflation of +2.2% 1,193 1.3% • Continued good affiliate performance Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q3'15 Comp sales New/closed Q3'16 stores -1.4% -2.8% Under erlyin lying g operat ating ing margin Under erlyin lying g EBITDA A margin • Underlying operating margin increased vs. LY resulting mainly from lower labor costs 5.9% 5.8% 5.5% 5.0% from the Transformation Plan 4.8% 4.3% 4.2% and lower commercial 2.9% 2.8% expenses 2.5% 2.2% 2.0% • Logistics expenses were slightly 1.1% 1.0% higher than LY Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q1'15 Q2'15 Q3'15 Q4'15* Q1'16 Q2'16 Q3'16

9 Third ird Quarte rter r 2016 Resul ults ts CSE – pro forma results Q3 2016 Net sales es Compa para rable ble sales es growth h ¹ • Net sales grew 8.9% at constant 7.0% 6.6% rates 40 6.0% 5.5% 68 • Comparable sales growth excl gas driven by Greece and -4 1,335 3.4% Romania, flat performance in 1,227 2.3% Czech and Serbia 1,231 • Deflation in Greece resulted from promotional environment -1.0% Q3'15 FX Q3'15 Comp sales New/closed Q3'16 in € Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 constant stores ¹ Comparable sales growth excl gas rates Under erlyin lying g operat ating ing margin Under erlyin lying g EBITDA A margin 8.6% 6.9% 6.8% 6.1% 6.4% 6.2% 5.8% • Strong underlying operating 4.6% 4.2% 4.2% 3.6% margin development vs. LY 3.3% 3.1% • Strong performance in Greece 1.7% • Further improvements shown in Czech Republic Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q1'15 Q2'15 Q3'15 Q4'15* Q1'16 Q2'16 Q3'16

10 10 Third ird Quarte rter r 2016 Resul ults ts Free cash flow generation ( € in Millions) 222 -272 -4 230 -146 -3 27 -66 -39 Free cash flow Operating Change in Income tax Net Interest and Free cash flow Pro forma adj PF Free cash Q3'15 cash flow* working paid investment dividend joint Q3'16 flow Q3'16 capital ventures Strong operating cash flow delivered • Working capital primarily affected by timing of payables • Net investment change in line with planned investments • YTD IFRS free cash flow of € 567 million, down € 216 million versus YTD Q3 2015 • * From continuing operations before changes in working capital and income tax paid

11 11 Third ird Quarte rter r 2016 Resul ults ts Net debt evolution ( € in Millions) 27 75 1,001 3,615 698 2,718 958 2,020 1,062 Net debt Ahold Net debt Combined net PPA Q2 2016 adj net Capital return Q3 FCF Q3 PPA Q3 2016 net Q2 2016 Delhaize Q2 debt Q2 2016 adjustments debt amortization on debt 2016 debt & other PPA adjustments related to the fair value adjustments of Delhaize debt and finance lease liabilities as a result of the • merger Combined gross debt and cash increased by € 993 million, resulting from the gross-up of cash pooling within former • Delhaize

12 12 Third ird Quarte rter r 2016 Resul ults ts Buy-back Yen bonds Buy-back and cancellation of ¥33 billion floating rate notes due May 2031 • Unwinding of the associated currency swap • ¥-notes and swap represent synthetic € 299 million long-term liability @7.065% annual • interest rate ¥-notes at purchase price of 108.1% for settlement on November 15, 2016 • Reflected in Q4’16 as one -off costs of € 243 million before tax • Funded by cash on hand, outlay of € 543 million • Transaction is value accretive, reduction in annual interest expense of app. € 21 million • No material impact on current leverage ratio’s, ability to fund future growth opportunities • or further optimize the capital structure