* at constant exchange rates
CEO Dick Boer said: “First quarter sales trends were similar to the previous quarter with a flat year-on-year performance, impacted by low inflation and volumes that remained under pressure in all our markets.
"In the United States, we decided to roll out a program to improve our customer proposition by investing in the quality and merchandising of our Fresh assortment, associate training and targeted price reductions in all our divisions. In the Netherlands, our market share performance stabilized versus the previous quarter and we continue to focus on improvements and additions to our assortment to further strengthen our commercial position.
"We are expanding our online position in the United States and the Netherlands, and we are pleased with the overall sales growth of over 20% on an identical basis.
"Our outlook for the next quarter reflects similar trading conditions to the first quarter as well as investments in our customer proposition and future growth."
This interim report includes forward-looking statements, which do not refer to historical facts but refer to expectations based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those included in such statements. These forward-looking statements include, but are not limited to statements as to the market trends in the Netherlands, Ahold’s improvements to customer proposition, improvements and additions to the assortment in the Netherlands, future growth, better focus on Albert Heijn and its commercial performance, efficient capital structure, share buyback, underlying operating margin in the Netherlands, cost savings, Reshaping Retail strategy, future cash flows, its acquisition of SPAR in the Czech Republic and the court approval of and size, funding and timing of the payment under the Waterbury settlement. These forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by the forward looking statements. Many of these risks and uncertainties relate to factors that are beyond Ahold’s ability to control or estimate precisely, such as the effect of general economic or political conditions, fluctuations in exchange rates or interest rates, increases or changes in competition, Ahold’s ability to implement and successfully complete its plans and strategies, the benefits from and resources generated by Ahold’s plans and strategies being less than or different from those anticipated, changes in Ahold’s liquidity needs, the actions of competitors and third parties and other factors discussed in Ahold’s public filings and other disclosures. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this interim report. Ahold does not assume any obligation to update any public information or forward-looking statements in this interim report to reflect subsequent events or circumstances, except as may be required by applicable laws. Outside the Netherlands, Koninklijke Ahold N.V., being its registered name, presents itself under the name of “Royal Ahold” or simply “Ahold.”
Frans Muller, President and Chief Executive Officer of Delhaize Group, commented: “Our first quarter shows a mixed performance, with very strong revenues in the U.S. but disappointing results in Belgium. In the U.S., our comparable store sales growth was primarily driven by the continued momentum at Food Lion. Hannaford comparable store sales growth was also positive. As expected, our price investments and commodity cost increases impacted our margin. In Belgium, we experienced weak first quarter sales and profitability, being the result of continuing vigorous competition, requiring more promotions and price investments, as well as a further increase in SG&A costs. At the same time customer satisfaction improved compared to last year. While we continued to face challenges in Serbia, we achieved comparable store sales growth and further market share gains in Greece and Romania.”
“In light of our focus on our core markets announced in March, we have recently signed agreements to divest our Bulgarian and Bosnian & Herzegovinian operations. We are on track to implement our strategy of Easy, Fresh & Affordable at 77 Food Lion stores later in the year. In Belgium, we are working on further differentiating the customer experience in our stores. The opening of two next generation stores in Belgium 10 days ago, bringing to life our new strategy centered on ‘buy well, eat well’, is an important step to improve our performance.”
“We re-iterate that, for 2014, our capital expenditures will increase to approximately €625 million at identical exchange rates and we plan to open 180 stores. We also intend to continue to generate a healthy level of free cash flow.”