Koninklijke Ahold Delhaize (AD) Q3 2024 earnings summary

Executive summary

• Q3 2024 delivered solid and consistent performance with net sales of €22.0 billion, up 1.0% at constant rates, driven by customer centricity, innovation, and operational discipline across nine countries.

• Comparable sales excluding gasoline rose 1.4% for the group, with 1.2% growth in the U.S. and 1.6% in Europe.

• Online sales increased 5.1% at constant rates, led by double-digit online grocery growth in Europe and most brands, despite the FreshDirect divestment.

• Strategic focus on omnichannel growth, digital loyalty, and store network modernization, with investments in technology and innovation supporting future growth.

• Rapid response to natural disasters and community needs, with significant donations and humanitarian aid provided in affected regions.

Financial highlights

• Q3 underlying operating margin was 3.9%, up 0.1 pts year-over-year, with underlying operating income at €855 million (+2.8%) and diluted underlying EPS at €0.62 (+7.0%).

• Net sales grew 1% year-over-year to €22 billion, supported by positive comparable sales and net store openings.

• Group online sales reached €2.2 billion, up 5.1% at constant rates.

• Free cash flow for Q3 was €535 million, up 4.6% year-over-year; year-to-date free cash flow was €1,290 million.

• IFRS results were impacted by €272 million in non-recurring costs from Stop & Shop closures and the Belgian Future Plan, with IFRS operating income at €583 million.

Outlook and guidance

• Reiterated 2024 guidance: underlying operating margin ≥4.0%, underlying EPS around 2023 levels, free cash flow of ~€2.3 billion, and net capital expenditures of ~€2.2 billion.

• U.S. Q4 margin expected to be at least at Q3's 4.2% level; positive margin trend also expected in Europe.

• High single-digit EPS growth expected for 2025 as part of the Growing Together strategy.

• €1 billion annual share buyback program on track for 2024 and to continue in 2025.

• Profi acquisition expected to close late Q4 2024 or early Q1 2025, excluded from 2024 outlook.