Delhaize Group Second Quarter 2012 Results


BRUSSELS, BELGIUM--(Marketwire -08/22/12)-

Financial Summary Second Quarter 2012 (at identical exchange rates)

» Revenue growth of 4.2% (1.3% organic growth)

» Comparable store sales decreased by 0.6% in the U.S. and increasedby 1.1% in Belgium

» Underlying operating margin of 3.2%, impacted by price investmentsand Food Lion repositioning

Financial Summary First Half 2012 (at identical exchange rates)

» Revenue growth of 5.0% (1.8% organic growth)

» Underlying operating margin of 3.3%


» Confirm full year underlying operating profit guidance, albeitat the bottom-end of the range, as Delhaize Group remains committed to improving customers' experience in terms of price and service

» Encouraging momentum from growth initiatives. Food Lionrepositioning continues to deliver strong revenue growth with sustained momentum inPhase One (comparable store sales growth of 3.2%) and positive trends in Phase 2

» Current gross annual cost savings plan will exceed the EUR 500million target and reach EUR 550 million by the end of 2012. Subsequent efficiency planbeing prepared as we are determined to fund our growth initiatives

» Reiterate free cash flow target of EUR 500 million in 2012

» CEO Comments

Pierre-Olivier Beckers, President and Chief Executive Officer of DelhaizeGroup,commented: "We are pleased to report that during the second quarter anumber ofour initiatives produced good results and we are confident that theywillsupport our revenue growth in the second part of the year.Specifically, theinvestments at Food Lion continued to pay off as the Phase One storessustainedstrong revenue growth in their second year after launch. Phase 2 storeshaveenjoyed similar positive momentum in the initial months following theirlaunchin March 2012. With the launch of Phase 3 in July 2012, we have nowrepositionedmore than 700 Food Lion stores, or 65% of the network. Our experience withFoodLion's repositioning gives us confidence that steps being taken elsewherein theGroup will also start to bear fruit. Turning to Belgium, we areencouraged bythe positive comparable store sales growth recorded during the secondquarterand believe we will see further positive impact resulting from additionalpriceinvestments, new store openings and remodelings. While Greececontinues todominate the headlines, Alfa Beta managed to gain market share and togrow itsprofitability,"

"Despite these positive trends and as expected, our growth initiativescontinuedto impact our underlying operating profit. We confirm that we willreach ourfull year underlying operating profit guidance. However, we expect toachievethe bottom-end of the range as we remain committed to improving ourcustomersexperience in terms of both price and service. Given the declinein ouroperating profit and the challenging environment, we recognize theneed toredouble our efforts and sharpen our focus. As previously described, weexpectto exceed our current cost savings program and deliver EUR 550 millionbyyear-end, and we are working on a multi-year plan focused onachieving greaterefficiency."

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Source: Delhaize Group via Thomson Reuters ONE


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