Koninklijke Ahold Delhaize (AD) Q2 2024 earnings summary

Executive summary

• Achieved strong Q2 2024 results, reiterating full-year outlook and advancing the 'Growing Together' strategy focused on customer value, innovation, and cost efficiency.

• Delivered solid performance amid household budget pressures, benefiting from structural changes and cost savings.

• Continued investments in price competitiveness, store remodeling, and digital capabilities to drive growth and loyalty.

Financial highlights

• Q2 net sales grew 0.7% at constant rates to €22.3 billion; comparable sales up 0.6% excluding gas.

• Underlying operating margin was 4.2%, up 10 basis points year-over-year; underlying operating income €933 million.

• Diluted underlying EPS rose 4.5% to €0.65; IFRS diluted EPS was €0.53, up 10.4% year-over-year.

• Group online sales increased 3.4%, with double-digit growth in Europe offsetting FreshDirect divestment.

• Q2 free cash flow was €378 million, down from €864 million in Q2 2023 due to prior year tax refund and working capital timing.

Outlook and guidance

• 2024 guidance reiterated: underlying operating margin ≥4.0%, underlying EPS around 2023 levels, free cash flow ~€2.3 billion, net capex ~€2.2 billion.

• Guidance incorporates FreshDirect divestment, tobacco exit in the Netherlands, and Stop & Shop closures.

• Profi acquisition in Romania expected to close in Q4 2024, excluded from current outlook.