Ahold Delhaize

Ahold Delhaize

07 January 2019Reading time: 3 minutes

Ahold Delhaize arose in 2016 after the merger between the Dutch Ahold and Belgian Delhaize. As a result of this merger Ahold Delhaize became one of the largest supermarket holdings in the world, with approximately 6700 supermarkets in 10 countries. Almost two-thirds of the turnover of Ahold Delhaize is generated in the United States and one-third in Europe.

The focus on the ‘Leading Together’ strategy, aims especially on investments which should improve the customer satisfaction and efficiency by, amongst other things, better use of online sales channels. Figures from research agency GfK show that Dutch supermarkets realize an increasing share of their turnover online. In the first quarter of 2018 Dutch supermarkets generated 3,6 percent of their revenue from online but in the third quarter of this year, this number increased to 4,1 percent. Market experts expects that even more consumers will discover the convenience of online groceries and will do their grocery shopping more often online. Ahold Delhaize could benefit from this trend in the Netherlands with their Dutch Albert Heijn shops.

The economy seems to be on the good side of Albert Heijn for now. Figures from the Centraal Bureau voor de Statistiek show that the revenue of the Dutch retail market have increased in September with 1,7 percent on an annual basis. Furthermore, the branch organization CBL expects that the sales of the Dutch supermarkets will pass 1 billion euro in the Christmas week.

It remains to be seen if this will happen and to which extend Albert Heijn will benefit from this, because the company itself claims that consumers are visiting the offline shops less and less. With a market share of 36 percent at this moment, The ‘Zaanse’ grocery is still market leader in the Netherlands but announced in December to change their business model drastically. The company wants to transform their supermarkets into eat- and deliver centres. The shelves that are now containing cleaning products and pet food, will be removed to make space for home delivery service points. For their delivery service Ahold Delhaize is currently in negotiation with companies such as Thuisbezorgd and Deliveroo. In addition, Ahold Delhaize is also planning on placing kitchens outside the shops for the preparation and sale of fresh meals. It remains to be seen if this new concept will catch on with consumers and if this will result in the desired revenue growth.

The stock price of Ahold Delhaize is now (20.12.2018) 21,8 percent higher compared to a year earlier at 22,34 euro. The highest stock price was reached at November 13th this year at 23,26 euro, after Ahold Delhaize raised their online revenue target for 2021 to 7 billion euro in a strategy update. Earlier the company was aiming for a online revenue target of 5 billion euro for 2020. Ahold Delhaize expects to generate a revenue from online sales of approximately 3.5 billion euro in 2018. The company also wants to buy own shares in 2019 for a total of 1 billion euro, where at the capital investments will be 2 billion euro in the same year. The buyback program could support the stock price of the share.

The future price of the stock is subject to several political, industrial and sector specific as well as economic factors. Investors should consider these risks when making their investment decisions. Developments can be different at any time than investors anticipated on, which could result in capital losses.

Vontobel products on Ahold Delhaize are tradable at DEGIRO.

Important legal information:

This information does not constitute a financial analysis, but product advertisement. Thus it does not meet the legal requirements to ensure the impartiality of financial analysis and is not subject to trade prohibition before the publication of a financial analysis.

Fordetailed information, particularly regarding the structure and the risks associated with an investment in the derivative financial instruments, prospective investors should read the Base Prospectus, which is available together with the Final Terms and any supplement to the Base Prospectus in electronic form on the issuer’s website: http://beursproducten.vontobel.com. Additionally, the Base Prospectus, anysupplements to the Base Prospectus and the Final Terms are available inprinted form, free of charge, at the registered office of the issuer: Vontobel Europe AG, Bockenheimer Landstrasse 24, 60323
Frankfurt am Main, Germany.


Investors should consider the applicable selling restrictions.
Companies of the Vontobel group may directly or indirectly pay commissions in varying amounts to third parties (e.g. brokers) in connection with the public offer and the distribution of the derivative financial instruments. Further information is available upon request from your distribution partner.

 

23/01/2019 13:02:22