Koninklijke Ahold Delhaize (AD) Q4 2024 earnings summary

Executive summary

• Achieved or exceeded all key goals for 2024, with net sales of €89.4 billion, a 4.0% underlying operating margin, and €2.5 billion in free cash flow, emphasizing strategic execution and cost savings of over €1.35 billion.

• Navigated a dynamic year marked by inflation, supply chain volatility, regulatory changes, and severe weather events, while advancing digital, e-commerce, and own brand strategies.

• Launched new digital initiatives, expanded e-commerce, and increased own brand penetration, driving customer loyalty and market share.

• Completed strategic projects, including the Belgium Future Plan, closure of underperforming U.S. stores, and divestment of FreshDirect, positioning for future growth.

• Continued focus on sustainability, reducing food waste and CO2 emissions, and promoting healthy communities.

Financial highlights

• Q4 net sales grew 0.6% to €23.3 billion; full year net sales up 0.9% to €89.4 billion.

• Online sales increased 5.8% in Q4 and 3.5% for the year; double-digit growth at key brands excluding FreshDirect.

• Underlying operating margin for Q4 was 4.1% (down 0.2 pts YoY); full year margin at 4.0%.

• Diluted underlying EPS was €0.69 for Q4 and €2.54 for the year, in line with guidance.

• Free cash flow reached €1.3 billion in Q4 and €2.5 billion for the year, exceeding guidance.

Outlook and guidance

• 2025 guidance: underlying margin around 4%, mid- to high-single-digit EPS growth, and free cash flow of at least €2.2 billion.

• Gross CapEx planned at €2.7 billion, reflecting investments in store growth, remodels, and technology.

• Integration of Profi to add ~€3 billion in net sales and €150 million in CapEx, with margin dilution offset by improvements elsewhere.

• Stop & Shop closures to impact reported sales by $550–575 million; regulatory changes in tobacco sales to affect European comps.

• Dividend per share expected to grow year-over-year; €1 billion share buyback program continues.