Ahold Delhaize announces solid first quarter results for 2017

  • Net sales increased by 65.1% to €15.9 billion (up 61.4% at constant exchange rates)
  • Net income increased by 72.8% to €356 million (up 68.2% at constant exchange rates)
  • Pro forma Q1 net sales increased by 2.9% to €15.8 billion (up 0.6% at constant exchange rates)
  • Pro forma underlying operating income increased by €45 million to €604 million, up 8.1% Pro forma Q1 underlying operating margin increased to 3.8%, compared to 3.6% in Q1 2016
  • Strong free cash flow of €197 million, with increased capital expenditure compared to Q1 2016
  • Integration on track, with net synergies of €56 million delivered in the first quarter

Zaandam, the Netherlands, 2017-May-11 — /EPR Retail News/ — Ahold Delhaize, a leader in supermarkets and eCommerce with market-leading local brands in 11 countries, published solid first quarter results for 2017 today (May 10, 2017), including an improved pro forma underlying operating margin for the Group.

Dick Boer, CEO of Ahold Delhaize, said: “We are pleased to report a resilient first quarter performance with an increase in margins for the Group despite the ongoing deflationary environment in the United States. We continue to make significant progress on the implementation of our Better Together strategy,  investing in our customer proposition, while improving margins.

“Ten months after the merger of Ahold and Delhaize, we are fully on track with the integration and we are delivering on our synergy targets. We are driving forward our integration programs and continue to focus on sharing best practices across and within regions, as we aim to further strengthen our great local brands to ensure they remain customer-focused, close to their communities and positioned to win in their markets.

“In the United States, although sales were impacted by continuing price deflation, adverse weather and the timing of Easter, we were able to offset the impact on margins due to the delivery of strong synergy savings in the quarter. Although deflationary pressure was in line with previous quarters, it improved towards the end of the first quarter and we expect sales performance to improve in the second quarter and to operate in a slightly inflationary environment in the second half of the year.

“The Netherlands again reported strong performance. Albert Heijn continued to improve and renew its product range, both in supermarkets and online. Bol.com grew its share of Plaza sales, now offering more than 15 million products, and increased its customer base in Belgium.

“In Belgium, sales performance was stable compared to the previous quarter, and underlying operating margin was broadly in line with last year. Sales growth in Central and Southeastern Europe was driven by Romania and Serbia, with stable margins for the region, supported by margin improvements in the Czech Republic and Serbia.

“We are encouraged by the positive development of the combined free cash flow for the Group despite higher capital expenditure. This allows us to continue investing in key channels and businesses, while returning excess liquidity to our shareholders.

“For the full year, we reiterate our target of realizing €220 million net synergies, including €56 million realized year to date and expect that the full year 2017 underlying operating margin for the Group will increase compared to 2016.”

Cautionary notice

This press release contains information that qualifies as inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

This communication includes forward-looking statements.  All statements other than statements of historical facts may be forward-looking statements. Words such as resilient, investing, strategy, improving, on track, continue to focus, aim to further strengthen, ensure, remain customer-focused, expect, target, committed, ongoing, progressing according to plan, enable, to be remodelled or other similar words or expressions are typically used to identify forward-looking statements.

Forward-looking statements are subject to risks, uncertainties and other factors that are difficult to predict and that may cause actual results of Koninklijke Ahold Delhaize N.V. (the “Company”) to differ materially from future results expressed or implied by such forward-looking statements. Such factors include, but are not limited to risks relating to competition and pressure on profit margins in the food retail industry; the impact of the Company’s outstanding financial debt; future changes in accounting standards; the Company’s ability to generate positive cash flows; general economic conditions; the Company’s international operations; the impact of economic conditions on consumer spending; turbulences in the global credit markets and the economy; the significance of the Company’s U.S. operations and the concentration of its U.S. operations on the east coast of the U.S.; increases in interest rates and the impact of downgrades in the Company’s credit ratings; competitive labor markets, changes in labor conditions and labor disruptions; environmental liabilities associated with the properties that the Company owns or leases; the Company’s inability to locate appropriate real estate or enter into real estate leases on commercially acceptable terms; exchange rate fluctuations; additional expenses or capital expenditures associated with compliance with federal, regional, state and local laws and regulations in the U.S., the Netherlands, Belgium and other countries; product liability claims and adverse publicity; risks related to corporate responsibility and sustainable retailing; the Company’s inability to successfully implement its strategy, manage the growth of its business or realize the anticipated benefits of acquisitions; its inability to successfully complete divestitures and the effect of contingent liabilities arising from completed divestitures; unexpected outcomes with respect to tax audits; disruption of operations and other factors negatively affecting the Company’s suppliers; the unsuccessful operation of the Company’s franchised and affiliated stores; natural disasters and geopolitical events; inherent limitations in the Company’s control systems; the failure or breach of security of IT systems; changes in supplier terms; antitrust and similar legislation; unexpected outcome in the Company’s legal proceedings; adverse results arising from the Company’s claims against its self-insurance programs; increase in costs associated with the Company’s defined benefit pension plans; and other factors discussed in the Company’s public filings and other disclosures.

Forward-looking statements reflect the current views of the Company’s management and assumptions based on information currently available to the Company’s management. Forward-looking statements speak only as of the date they are made, and the Company does not assume any obligation to update such statements, except as required by law.

Phone: +31 88 659 9111

Source: Ahold Delhaize

The Andersons Position for Profitable Growth With Release of First Quarter Results

MAUMEE, Ohio, 2017-May-08 — /EPR Retail News/ — The Andersons, Inc. (NASDAQ: ANDE) announces financial results for the first quarter ended March 31, 2017.

Company reports net loss of $3.1 million or $0.11 per diluted share; results include $7.8 million in pretax costs associated with exiting the Retail business and a $4.7 million pretax gain on the sale of the Florida farm centers.

  • Grain Group records a $12.3 million pretax year-over-year improvement, but incurs a pretax loss of $5.1 million
  • Ethanol Group delivers $1.7 million of pretax income on better margins despite continuing distillers dried grains (DDGs) margin pressure
  • Plant Nutrient Group earns pretax income of $6.7 million, including the gain on the sale of its Florida farm centers
  • Rail Group earns $6.1 million of pretax income in a continuing soft market
  • Retail Group records $6.8 million pretax loss, including exit costs

The Company reported a first quarter 2017 net loss attributable to The Andersons of $3.1 million, or $0.11 per diluted share, on revenues of $852 million. This result included pretax costs of $7.8 million related to closing the Company’s retail stores, which is scheduled to be completed by the end of the second quarter. This result also represents an $11.6 million or $0.41 per diluted share improvement over the net loss of $14.7 million, or $0.52 per diluted share, on revenues of $888 million recorded in the same period of 2016.

“Three of our four businesses posted better year-over-year results,” said CEO Pat Bowe. “While we are not satisfied with our overall results, we continue to work hard to improve execution, sharpen our cost focus, and position the Company for profitable growth. We are closing our Retail business and sold underperforming Plant Nutrient Group assets in Florida. We also acquired a small specialty grain handling and milling business that further expands our food ingredient capabilities.”

Bowe continued, “For the second quarter in a row, our Grain Group improved year-over-year results in its base business by approximately $10 million as it registered improved space income that was partially offset by lower than expected basis appreciation in the quarter. In addition, post-harvest farmer selling has been slow. Grain’s affiliates also improved their performance year over year.  Ethanol benefitted some from margin hedging but is still fighting both vomitoxin-related discounts and lower DDG values relative to corn. Plant Nutrient value added product margins continued to be compressed by oversupply during the quarter, although volumes are up year over year. Rail continued to profitably operate through what we believe are the later stages of a cyclical market downturn. Overall, we remain confident in our ability to deliver long-term value and growth to our shareholders.”

First Quarter Highlights 

  • The Grain Group’s pretax income improved by $12.3 million over the first quarter of 2016, mostly as a result of improved space income. Our base grain business drove almost 80% of the improvement, with the group’s affiliates accounting for the rest.
  • Ethanol margins were better year over year, in large part because the group had hedged about half of its production coming into the quarter. DDG values have been negatively impacted by low demand from China and discounts due to vomitoxin in the Eastern Corn Belt. The group’s Albion expansion came on line late in the quarter, ahead of schedule, on budget and safely.
  • The Plant Nutrient Group’s volume and margins were comparable to first quarter 2016 levels. The Group recorded a $4.7 million pretax gain on the sale of its Florida farm centers in March.
  • Rail Group pretax income was down $3.3 million as fleet utilization dropped and maintenance and storage expenses increased.
  • The Retail Group recorded $7.8 million in pretax costs associated with closing the business. Almost all of the charges were for employee separation expenses. Gross profit generated in the early stages of inventory liquidation helped soften the impact of those charges.

First Quarter Segment Overview

Grain Group continues on its road to recovery

The Grain Group incurred a pretax loss of $5.1 million in the quarter, a $12.3 million improvement over the $17.4 million pretax loss the group incurred in the same period last year. The table below separates the results of Base Grain, which comprises grain facilities that the Company operates, from the earnings from investments in our grain affiliates, which include Lansing Trade Group (LTG) and Thompsons Limited.

Base grain pretax income improved by $9.7 million in the first quarter of 2017 compared to first quarter 2016 results. Space income improved by more than $9 million, and the sale of Iowa assets in the second quarter of 2016 eliminated the recurrence of about $1.4 million in losses.  While the group’s merchandising margins improved over 2016 results, low prices kept growers largely sidelined and end users have not been motivated to pay carries to secure ownership later in the year. The result is that some normal first quarter activity has been pushed into the second and third quarters.

The group is aligned with current USDA forecasts of 90 million acres of corn and 89.5 million acres of soybeans. Acres could shift from corn to beans if the current cool and wet conditions continue. Current high grain stocks are expected to cause more corn to move by harvest time, which could create opportunity for the Grain Group.

Ethanol Group improves performance and new Albion capacity brought on line; DDG issues continue

The Ethanol Group earned pretax income of $1.7 million in the first quarter, a $4.4 million improvement over the $2.7 million pretax loss it incurred in the same period in 2016, primarily on higher year over year margins. Hedging decisions and slightly lower corn costs helped deliver those results despite robust industry production and stocks.

The new assets at the expanded ethanol production facility in Albion, Michigan became operational and the project was substantially completed in March, on time and on budget. This expansion has more than doubled the capacity of the plant that previously produced approximately 65 million gallons per year.

The group continued to realize discounts on DDGs during the quarter due to persistent problems with vomitoxin in the vicinities of the group’s three eastern facilities. Lower international demand for DDGs, particularly as a result of Chinese tariffs, put pressure on pricing and margins.

The four ethanol plants combined for a first quarter production record of more than 98 million gallons, about 4 percent over the comparable period, in part because the new Albion capacity was on line for part of the quarter. The group also successfully executed maintenance shutdowns at two of the four plants during the quarter.

Plant Nutrient Group earns pretax income of $6.7 million, including a $4.7 million pretax gain on the sale of Florida farm centers

The Plant Nutrient Group recorded pretax income of $6.7 million in the first quarter compared to pretax income of $1.7 million in the prior year period. The 2017 results included a $4.7 million pretax gain on the sale of its Florida farm centers in March.

The group continues to see lower margins in all segments except in base nutrients and in its lawn fertilizer business. The quarter was characterized by low prices, oversupply and choppy markets, leading the farm gate to delay buying decisions. Given these conditions, the group managed its inventory ownership positions conservatively.

Volumes of base nutrients (NPK) were down about 9 percent year over year, while higher-margin value added nutrient tons (low salt starter fertilizers, micro nutrients) were up 9 percent. Volumes of products in the group’s other businesses (Farm Centers, Lawn and Cob) were flat. Those margin and volume changes combined to reduce gross profit by almost $1 million. The Group’s productivity and efficiency efforts more than offset that reduction.

Early second quarter weather conditions have been wet and cool across the farm belt and have resulted in a slow start to the planting season in some areas. Continued unfavorable planting conditions could prove detrimental by shortening the growers’ fertilizer application window, pressuring margins as dealers and wholesalers with long positions try to sell out of them. As the season progresses, farmers may shift their planting intentions from corn to soybeans.

Rail Group registers solid results in spite of a continued weak market

The Rail Group earned first quarter pretax income of $6.1 million compared to $9.4 million in the same period of the prior year.

Base leasing operations earned $0.7 million, down $3.7 million year over year, on nearly 8 percent lower utilization. Utilization averaged 83.6 percent during the quarter compared to 84.8 percent sequentially and 91.5 percent during the same period last year. Average lease rates were flat, and maintenance and storage costs were higher than in the year-ago period.

Railcar sales generated $3.6 million of pretax income in the quarter compared to $2.4 million in the first quarter of 2016. While these transactions are part of the normal portfolio management process, they vary in size from quarter to quarter and year to year depending on rail market and financing conditions.

Rail’s service and other pretax income was $1.8 million in the quarter, down from $2.6 million in the same period of 2016. The prior year result included $1.1 million from the redemption of the group’s investment in a short line railroad. The group’s repair and fabrication facilities set all-time quarterly records for sales and pretax income during the quarter.

North American rail traffic began to improve year over year during the quarter against weak comparative 2016 volumes. In addition, Class I railroad efficiency declined from the previous quarter. However, railroad shipping volumes remain historically weak. Although the group continues to be well-positioned for this slower rail cycle, it expects modestly improved utilization rates to be coupled over the near term with leases of shorter duration with lower lease rates.

Company begins exiting the retail business

The Company began the process of closing its remaining four retail stores and shutting down the business during the quarter. The group’s net pretax loss of $6.8 million included closing costs of $7.8 million, most of which were employee separation expenses. The group managed the beginning stages of inventory liquidation well, allowing it to post better sales, gross profit and pretax income numbers than in 2016 without considering these unusual costs.

Corporate expenses continue to decrease

Unallocated Company level expenses for the first quarter of 2017 were $8.2 million, down $2.7 million from the $10.9 million incurred in the comparable 2016 period.

Conference Call

The Company will host a webcast on Thursday, May 4, 2017 at 11:00 A.M. ET, to discuss its performance and provide its updated outlook for 2017. To dial-in to the call, please dial 866-439-8514 or 678-509-7568 (participant passcode is 59598749). It is recommended that you call 10 minutes before the conference call begins.

To access the webcast: Click on the link: http://edge.media-server.com/m/p/4857u2rj. Log on. Click on the phone icon at the bottom of the “webcast window” on the left side of the screen. Then, you will be provided with the conference call number and passcode. Click the gear set icon (left of the telephone icon) and select “Live Phone” to synchronize the presentation with the audio on your phone.

A replay of the call can also be accessed under the heading “Investors” on the Company website at www.andersonsinc.com.

Forward Looking Statements

This release contains forward-looking statements. These statements involve risks and uncertainties that could cause actual results to differ materially. Without limitation, these risks include economic, weather and regulatory conditions, competition, and the risk factors set forth from time to time in the Company’s filings with the Securities and Exchange Commission. Although the Company believes that the assumptions upon which the financial information and its forward looking statements are based are reasonable, it can give no assurance that these assumptions will prove to be correct.

Company Description

Founded in Maumee, Ohio, in 1947, The Andersons is a diversified Company rooted in agriculture conducting business across North America in the grain, ethanol, plant nutrient and rail sectors. For more information, visit The Andersons online at www.andersonsinc.com.


John Kraus
Phone: 419-891-6544
E-mail: investor_relations@andersonsinc.com

SOURCE: The Andersons, Inc.