In 1997, the Delhaize 'Le Lion' Group achieved new growth in all its markets and expects to enjoy further growth in 1998.
The main achievements in 1997 were:
- Expansion of Food Lion due to external growth
- The creation of a new growth center in Asia (Thailand and Indonesia)
- A partnership with Comptoirs Modernes in France for the development of the PG Group
- A significant increase in Alfa-Beta's sales in Greece which began in the second half of the year
- Accelerated expansion of Delvita in the Czech Republic
- An increase in sales in Belgium of BEF 4.2 billion
The figures for the
Delhaize 'Le Lion' Group in 1997 were:
- Consolidated sales of BEF 508.6 billion -> +23.3%
- Consolidated cash flow from operations (EBITDA) of BEF 33.8 billion -> 39.3%
- Current net profits for the consolidated companies of BEF 10 billion -> +21.2%
- Current net profits of the consolidated companies, Group share, of BEF 5.2 billion -> +21.2% for the consolidated companies of BEF 10 billion -> +21.2%
- Current net profits of the consolidated companies, Group share, per share of BEF 100.3 -> +16,2%
At the General Meeting of May 28, 1998, the Board of Directors will propose the distribution of a dividend of BEF 30, net of withholding tax, an increase of 11.1%.
*Net current profits: excluding exceptional profits and depreciation of goodwill.
DELHAIZE 'LE LION' GROUP RESULTS
|
The Delhaize 'Le Lion' Group continued to grow in all of its markets. At the end of 1997, the number of outlets in operation totalled 1,816, a year on year increase of 116. During the year 240 stores were opened or acquired, including 100 Kash n' Karry outlets.
|
|
|
Once again the Delhaize 'Le Lion' Group achieved an all time consolidated sales record (tax excluded) in 1997 of BEF 508.6 billion compared with BEF 412.3 billion in 1996, an increase of 23.3%. The average US dollar rate used in 1997 was BEF 35.7755.
|
|
|
Consolidated cash flow from operations totalled BEF 33.8 billion as against BEF 24.3 billion in 1996, an increase of 39.3%.
|
|
Current net profits for the consolidated companies attained a total of BEF 10 billion, an advance of 21.2% over the preceding year. The consolidated net profits, Group share, were BEF 5.2 billion, a rise of 16.2%.
Taking the depreciation of goodwill and the exceptional results into account, the net consolidated profits, Group share, amounted to BEF 4.9 billion as compared with BEF 4.4 billion in 1996, a growth of 12.6%.
|
|
The Group share of current net profits of the companies in consolidation has risen from BEF 86.4 in 1996 to BEF 100.3 per share. This represents an increase of 16.2%.
The Board of Directors will propose the distribution of a dividend of BEF 30 net of withholding tax at the General Meeting, an increase of 11.1%.
|
|
ACTIVITIES AND RESULTS OF THE MAIN OPERATING COMPANIES
In the USA:
At the end of 1997
Food Lion operated 1,157 supermarkets, an increase of 45 over the previous year. During the year Food Lion took over 100 Kash n' Karry supermarkets and opened 64 new outlets, of which 25 were relocations. In the Texas region 61 supermarkets and a distribution centre were closed. 99 supermarkets were refurbished. During the fourth quarter of the year, Kash n’ Karry was operationally profitable. In 1997 (53 weeks) Food Lion had sales of USD 10.2 billion (BEF 364.7 billion), a 13.2% gain. Current net profits stood at USD 232.6 million, an advance of 12.9%. After making exceptional provision of USD 87.1 million to cover the closure of the stores in Texas, the net profits for the year came to USD 179.5 million.
During the last quarter of the year,
Super Discount Markets opened a 14th 'Cub Food' giant supermarket. Total sales stood at USD 263.8 million (BEF 9.4 billion), a drop of 4%. Cash flow from operations totalled USD 6.6 million as compared with USD 6.8 million in 1996. The net results are in profit.
In Europe:
Delhaize 'Le Lion' in Belgium had sales (including VAT) of BEF 111.2 billion, an increase of BEF 4.2 billion, 4% more than in the previous year. The Belgian chains opened 33 new stores. A new Delhaize 'Le Lion' supermarket was opened and one of the first generation closed down. 11 existing supermarkets were modernized. The number of affiliated stores went up from 201 to 217 in 1997. 8 Di's and 10 Tom & Co's were also opened during the year. 3 new Delhaize2 replaced former Dial stores. Delhaize 'Le Lion', Belgium, had a cash flow from operations of BEF 3.5 billion, 8.2% less than in 1996. Given a situation where consumption started to recover only towards the end of the year, the company launched a series of dynamic marketing initiatives which succeeded in relaunching sales, although at the cost of short term pressure on profits. Thanks to the strong increase in income from subsidiaries, Delhaize 'Le Lion' S.A. ended the year with a net profit of BEF 2.1 billion as against BEF 1.9 billion in 1996, an advance of 11.3%.
In Greece, Alfa-Beta opened 6 new supermarkets in 1997. The reduction in sales prices of several thousand items during the first half of the year, revitalised sales during the second half (up by 20.8% over 1996). This excellent second half enabled Alfa-Beta to end the year with sales (VAT included) of GRD 111.4 billion (BEF 14.6 billion), an increase of 16.8% and cash flow from operations of GRD 6 billion, up by 27.5%. Net profits increased by 61.2% and stood at GRD 1.1 billion.
In France the P.G. Group achieved sales of FRF 2.2 billion (BEF 13.6 billion), including VAT, representing growth of 6.7%. 5 outlets were opened during the year, two integrated supermarkets and 3 P.G. partners. The year ended on an increase of 22.3% in cash flow from operations and net profits of FRF 36.7 million, an advance of 9%, despite the fact that company tax rates increased. To ensure growth of the P.G. Group, the Delhaize 'Le Lion' Group has entered into partnership (50/50) with the French food retailer 'Comptoirs Modernes'. The latter operates 500 supermarkets in France under the trading name of 'STOC'. The Delhaize 'Le Lion' Group made a capital gain on the transfer of 50% of the shares of the P.G. Group.
In the Czech Republic, Delvita increased its rate of growth by opening 13 supermarkets, putting its new distribution centre into operation and launching the Plus card. Sales (including VAT) totalled CZK 6.1 billion (BEF 6.9 billion), a figure 63.8% above that for last year. Cash flow from operations more than doubled and stood at CZK 360 million, an increase of 111.7%. Delvita ended the year with net profits of CZK 1.2 million.
In Asia:
The Delhaize 'Le Lion' Group intends to create a growth centre in Asia and has confidence in the considerable potential of the continent over the long run. Thailand and Indonesia were selected as the first countries in which investments were made. They totalled BEF 334 million in 1997.
In Indonesia, Lion Super Indo, trading as Super Indo has taken over 11 supermarkets previously operated by the Salim Group, partner of the Delhaize 'Le Lion' Group through a long term cooperation agreement to develop a large chain of supermarkets in Indonesia.
The Delhaize 'Le Lion' Group will become the majority shareholder in Lion Super Indo as soon as the Indonesian authorities open up the retail sector to foreign investors.
In Thailand, the Bel-Thai Supermarket Company is a new Thai company in which the Delhaize 'Le Lion' Group holds 45% of the capital. A first store, previously operated by The Mall, partner of the Delhaize 'Le Lion' Group, has been taken over by the new company and trades under the Food Lion Supermarket trade name. A second outlet, also in Bangkok, opened in December 1997.
The Outlook for 1998: continued growth for the Group in all its markets
The Delhaize 'Le Lion' Group expects to achieve further significant growth in its various markets. More than 100 new outlets will reinforce its network of trade names. The good results recorded in the first months of 1998 give every reason to be optimistic for the future. The Delhaize 'Le Lion' Group has set aside a budget of BEF 20 billion for capital expenditure in 1998.
In the USA:
Food Lion will continue its growth policy and open 75 new supermarkets of which 17 will be relocations. 133 outlets will be modernized and opportunities for further acquisitions will be studied. The Kash n' Karry results will have a favourable effect on 1998 results.
Super Discount Markets will open 3 'Cub Foods' giant supermarkets in the Atlanta area by acquiring existing stores.
In Europe:
In Belgium,
Delhaize 'Le Lion' expects to modernize 10 existing supermarkets and to open one supermarket, 7 Di's, 9 Delhaize2's, 18 affiliated stores and 17 Tom & Co's.
Alfa-Beta has plans to open 10 supermarkets.
The
P.G. Group will continue its growth with 4 new outlets. It will also begin to change the trading name of its shops from 'P.G.' to 'STOC'.
Delvita will open 17 new supermarkets and a second distribution centre located in the eastern part of the Czech Republic. This will allow for the opening of new outlets in neighbouring countries over the medium term.
In Asia:
Since 1 January 1998 a permanent team of Belgian managers has been on site with a view to expanding the Group's brand names.
Lion Super Indo is planning to completely remodel its 11 existing outlets and open 3 new supermarkets.
Bel-Thai expects to open 5 new supermarkets which will trade under the name 'Food Lion Supermarket'.
In the course of 1998 Mr Gui de Vaucleroy will reach the 65 retirement age for Managing Directors. The Board of Directors has appointed Mr Pierre-Olivier Beckers as his successor in the post with effect from January 1, 1999.
Mr Frans Vreys will reach the age limit as Chairman of the Board of Directors at the General Meeting of May 1999. He will continue as a Director of the company.
Mr Gui de Vaucleroy has been called upon to take over from Mr Frans Vreys as Chairman of the Board of Directors at the end of the May 1999 General Meeting.
See Related Charts:
Evolution of the consolidated results of the Delhaize 'Le Lion' Group
Evolution of the staff of the Delhaize 'Le Lion' Group