Ahold Releases Strong Q1 Results for 2016; Approaches Merger with Delhaize
ZAANDAM, THE NETHERLANDS - A strong Q1 2016 financial report is bringing Ahold even closer to its impending merger with Delhaize, beating analysts expectations for income by almost $16 million. Ahold CEO Dick Boer says this news puts them right on track to complete the merger by the middle of this year.
“We continue to make good progress on our proposed merger with Delhaize, which we expect to complete in mid-2016,” shared Boer. “Working together towards this common goal reaffirms our view that the merger will create a better and more innovative retailer, capable of delivering enhanced value for our customers, associates, and shareholders.”
Ahold estimates that when the merger is complete, an approximate $1.11 billion (€1.0 billion) return will go back to Ahold shareholders through both capital return and a reverse stock split. Current Ahold shareholders will, directly or indirectly, hold approximately 61%, while former Delhaize shareholders will, directly or indirectly, hold approximately 39% of the outstanding ordinary shares in the combined company.
As far as this ending quarter goes, adjusted operating income increased 14.7% to $500.6 million (€449 million), beating the $485.2 million (€434 million) average prediction that Bloomberg analysts revealed in a poll. Net sales reached $13.19 billion (€11.8 billion), which the company says was driven by solid store operations, a strong increase in online sales, improved profitability, and a strong free cash flow.
“We continue to deliver on our strategic objectives, with a good operational and financial performance in the first quarter,” Boer continued. “Our focus remains on serving our customers and delivering on our Simplicity program, in order to invest in our great local brands to ensure that we provide even more value and innovation.”
Other highlights from Ahold's Q1 2016 financial report include:
- Continued strong online sales growth, with net consumer sales up 27.4% at constant exchange rates
- Underlying operating margin of 3.8% (Q1 2015: 3.5%)
- 15.1% increase in Group underlying operating income (up 14.7% at constant exchange rates)
- Strong free cash flow of €287 million (Q1 2015: €186 million)
- Simplicity program and continued cost control driving improved profitability
As of 5:36 PM GMT, Ahold shares were up 2.5% in Amsterdam trading to reach $22.78 (€20.37), raising its market cap to $18.56 billion (€16.6 billion). Delhaize shares also rose 2% in Brussels, reaching to trade at $107.42 (€96.12) for a market cap of $11.01 billion (€9.85 billion).
As we reach closer to mid-2016, when Ahold and Delhaize say their merger will be complete, count on continued coverage from AndNowUKnow.