Thi hird d Qua uarter er 20 2017 Re 7 Resu sults November 8, - PowerPoint PPT Presentation

Thi hird d Qua uarter er 20 2017 Re 7 Resu sults November 8, 2017

Q3 Q3 Hi High ghli ligh ghts ts Dick Boer President and CEO

3 Third ird Quarte rter r 2017 7 Resul ults ts Highlights – third quarter 2017 Pro forma net sales up 2.1% at constant exchange rates to € 15.1 billion • Strong sales performance in the U.S., gaining market share across our brands • Online businesses growing total net consumer sales by more than 20% • Pro forma underlying operating margin increased to 3.9%, up 40 basis points • compared to Q3 2016 Strong free cash flow of € 426 million, up € 340 million, with guidance of € 1.6 billion • for FY 2017 reiterated Free cash flow for FY 2018 expected to increase, including capital expenditure to • step up to € 1.9 billion New € 2 billion share buy back program for 2018, following completion of the • € 1 billion program in 2017

Fin inanc ancial ial Re Resu sult lts Jeff Carr CFO

5 Third ird Quarte rter r 2017 7 Resul ults ts Group performance - pro forma Quart rter r 3 € in million Change Change 2017 2016 actual rates constant rates Net sales es 15,121 15,282 (1.1)% 2.1% Net sales excl gas 14,887 15,059 (1.1)% 1.9% Under erlyin lying g EBITDA 1,029 981 4.9% 8.4% Underlying EBITDA margin 6.8% 6.4% Under erlyin lying g operat ating ing income 595 542 9.8% 13.3% Underlying operating margin 3.9% 3.5% Operating Income 540 451 19.7% 23.9% Income from continu nuin ing g operat atio ions ns 359 277 29.6% 34.2%

6 Third ird Quarte rter r 2017 7 Resul ults ts Ahold USA – pro forma results Q3 2017 s growth 1 Net sales Comparable le sales € in million • Net sales up 0.8% at constant rates 23 36 • Comparable sales ex gas -284 -14 up 0.7% 5,665 5,425 5,381 • Retail inflation of 0.9% 0.7% 0.3% -1.8% -0.5% -0.1% • Gaining market share across our brands Q3'16 FX Q3'16 Comp New/ Gas Q3'17 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 constant sales closed rates ex gas stores ¹ Comparable sales growth excl gas Underlying lying EBITDA margin in Underlying lying operating rating margin in • Underlying operating 7.1% 7.0% 6.9% 6.8% 6.8% margin up 0.2 percentage points 4.2% 4.1% 4.0% 4.0% 3.9% • Strong synergy and “save for our customers” delivery • Continued price investments and increased promo spend * Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17

7 Third ird Quarte rter r 2017 7 Resul ults ts Delhaize America – pro forma results Q3 2017 Net sales Comparable le sales s growth € in million • Net sales up 2.2% at 82 6 constant rates -197 • Comparable sales up 2.3% 3,888 3,780 • 20 th consecutive quarter of 2.3% 3,691 2.2% 1.3% 1.3% volume growth at Food Lion 0.0% • Retail inflation of 0.5%, Food Lion back to positive Q3'16 FX Q3'16 Comp New/ Q3'17 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 constant sales closed inflation rates stores Underlying lying EBITDA margin in Underlying lying operating rating margin in • Underlying operating 7.1% 7.1% 7.0% 6.8% margin up 0.3 percentage 6.6% points 3.9% 3.8% 3.8% • Strong synergy and “save 3.6% 3.5% for our customers” delivery • Partly offset by higher depreciation expenses Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17

8 Third ird Quarte rter r 2017 7 Resul ults ts The Netherlands – pro forma results Q3 2017 Net sales Comparable le sales s growth € in million • Net sales up 4.1% 17 6.0% 111 • Comparable sales up 3.6% 4.9% (up 2.3% ex bol.com) 3.6% 3.3% 2.8% 3,277 • Retail inflation of 2.4% 3,148 • Continued online sales growth Q3'16 Comp sales New/closed Q3'17 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 stores Underlying lying EBITDA margin in Underlying lying operating rating margin in • Underlying operating 7.2% 7.2% 7.1% 7.1% 6.9% margin at 4.9%, up 0.4 percentage points 5.1% 5.0% 4.9% 4.9% 4.5% • Synergies and good cost control partly offset by higher pension charges • Margin ex bol.com at 5.5%, up 0.4 percentage points Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17

9 Third ird Quarte rter r 2017 7 Resul ults ts Belgium – pro forma results Q3 2017 Net sales Comparable le sales s growth • Net sales flat € in million 3 • Comparable sales down -3 0.3% • Retail inflation of 0.7% 1,213 1,213 1.3% • Good performance at 0.0% affiliate stores offset by -0.9% -0.6% -0.3% weaker company-owned Q3'16 Comp sales New/closed Q3'17 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 stores performance stores Underlying lying EBITDA margin in Underlying lying operating rating margin in • Underlying operating margin up 1.1 percentage 6.0% 5.5% 5.4% points caused largely by 5.2% 5.0% one-offs 3.1% 2.5% 2.4% 2.3% • Synergies offset by 2.0% additional investments in promotions Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17

10 10 Third ird Quarte rter r 2017 7 Resul ults ts CSE – pro forma results Q3 2017 s growth 1 Net sales Compara rable le sales € in million • Net sales up 3.1% at 15 7 constant rates 5.7% 37 • Comparable sales ex gas 3.5% up 0.5%. Strong 1,426 1,382 1,368 1.7% performance in Romania, 1.5% 0.5% Serbia, and Czech Republic • Sales in Greece impacted Q3'16 FX Q3'16 Comp New/ Q3'17 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 by normalizing competitive constant sales closed rates stores environment versus LY ¹ Comparable sales growth excl gas Underlying lying EBITDA margin in Underlying lying operating rating margin in • Underlying operating 7.6% 7.2% 6.7% margin up 0.2 percentage 6.5% 5.7% points 5.0% 4.3% 4.1% • Significant margin increase 3.8% 3.0% in Romania, Serbia and Czech Republic partly offset by lower margins in Greece Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17

11 11 Third ird Quarte rter r 2017 7 Resul ults ts Free cash flow generation* 2017 2016 € in million Q3 YTD Q3 YTD Operating cash flow 951 3,006 798 2,727 Change in working capital (52) (391) (176) (575) Income tax paid – net (111) (328) (100) (319) Cash from cont. operations 788 2,287 522 1,833 Investments (397) (1,213) (449) (1,161) Divestments 65 128 56 73 Net interest paid (32) (195) (46) (241) Dividends from joint ventures 2 16 3 17 Free cash flow (post-tax) 426 1,023 86 521 * This represents the combined free cash flow of Ahold and Delhaize excluding pro forma adjustments.

12 12 Third ird Quarte rter r 2017 7 Resul ults ts Synergies and One-time Costs update 2017 € in million Q3 YTD United States 36 108 Europe 22 53 Global Support Office 10 24 Ahold Delhaize Group Synergies 68 185 Program Expected Q3 YTD to date full costs Integration costs 16 94 262 380 Brand centric restructuring costs 26 30 30 70 Increased net synergy target for 2017: from € 220 million to € 250 million • Q3 YTD incremental net synergies in P&L: €182 million (Q3‘16 YTD € 3 million) • FY incremental net synergy target in P&L: €228 million (FY’16 € 22 million) • Integration and brand centric restructuring on track •

13 13 Third ird Quarte rter r 2017 7 Resul ults ts New share buyback announced for 2018 For 2018 we expect: Increase in Free cash flow • Including step-up of capex to € 1.9 billion • Online capital investments from € 100 million in 2017 to € 150 million in 2018 • Accelerating investments to drive digital transformation • Ongoing investments to keep store base up to date • New share buyback program of € 2 billion starting in January 2018 for 12 months, following completion of the € 1 billion program in 2017

Bu Busi sines ness s Hi High ghli ligh ghts ts Dick Boer President and CEO

15 15 Third ird Quarte rter r 2017 7 Resul ults ts Innovation drives loyalty and growth Continu inued innov ovation ion provid ides s a seamle less ss online ine / in-store ore experie rience and makes s shop opping ing easier, hassle sle free, and more entert rtain ining ing Accelerating investments in our online businesses, on track to almost € 3 billion • online consumer sales this year and close to € 5 billion by 2020 Optimizing our own-brand portfolios and leveraging expertise from both sides • of the Atlantic, providing healthy and convenient choices for our customers Innovating the shopping experience, to provide customers with new concepts • and using data analytics to develop digital loyalty programs and to provide personalized offers and promotions