Koninklijke Ahold Del Ord

Ladies and gentlemen, good morning and welcome to the analyst conference call on the first quarter 2021 results of AHA Delhaize. Please note that this call is being webcast and recorded. Please note that in today's call, forward-looking statements may be made. All statements other than statements of historical facts may be forward-looking statements. Such statements may involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those included in the statement. Such risks and uncertainties are discussed in the Interim Report, First Quarter 2021, and also in AHA DOHESA Public Findings and Honor Disclosures. AHA DOHESA Disclosures are available on AHADOHESA.com. Forward-looking statements reflect the current views of AHA DOHESA Management and assumptions based on information currently available to AHA DOHESA Management. Forward-looking statements speak only as of the date they are made. and Aron Delhaize does not assume any obligation to update such statement except as required by law. The introduction will be followed by a Q&A session. Any views expressed by those asking questions are not necessarily the views of Aron Delhaize. At this time, I would like to hand over the call to Alvin Concepcion, Senior Vice President, Investor Relations. Please go ahead.

Thank you. Welcome to our first quarter 2021 results conference call. On today's call are Franz Muller, our CEO, and Natalie Knight, our CFO. After a brief presentation, we will open the call for questions. The earnings release and the presentation slides can be accessed through the investor section of our website, aho.hayes.com. We ask that you please limit yourself to two questions. If you have further questions, then please re-enter the queue. I'll now turn the call over to Franz. Thank you very much, Alvin, and good morning, everyone.

We have now surpassed the one year mark of the COVID-19 pandemic and its effects continue to have an impact across our geographies. In response, we spent approximately 150 million euros in the first quarter to support customers, associates and communities with COVID-19 relief care, which is more than double the amount compared to the first quarter of last year. We also pledged approximately 20 million euros in charitable donations for this year splits evenly between the US and Europe. And we'll continue, of course, to support health and safety measures, which remains a top priority to enable us to further strengthen our brand's positions as leading local omnichannel retailers. Our brands, together with our suppliers, remain focused on fulfilling their vital role in society by maintaining food and product supplies to local communities. And in addition, our US brands have support vaccinations through their pharmacies in the U.S. I remain thankful for the efforts of our associates who have had a consistent focus on safety while at the same time providing great customer service and community support. Now let me focus a little bit on the financial results. Natalie, of course, will go into more detail on the financial performance in the first quarter as well as to our outlook for 2021. And for now, you can see in our press release and slide four some of the highlights. Although COVID-19 continues to impact our results positively, we have now entered a period where our year-over-year growth rates are affected by the lapping of difficult prior year comparisons. That said, we began 2021 in a strategically much stronger position than before the COVID-19 pandemic began. Overall, we are very pleased with the underlying first quarter performance in both the US and Europe. Our two-year comparable sales tech sequentially accelerated in the first quarter 2021 versus the Q4 2020 in both the US and Europe, as we've been able to retain a strong level of underlying consumer demand by continuing to adapt to the enduring consumer behavior changes. These behaviors include increased working from home, preference for healthy and fresh products, and of course, higher online demand. For those that are less familiar, we have spoken to a two-year sales, comparable sales growth rate, or what is also referred to as a two-year comparable sales stack. This is simply the comp growth rate in the current year added to the comp growth year in the prior year. And because of the volatility over the course of the prior year quarter, looking at the two years comp stack is a helpful measure and proxy to gauge the momentum between periods. And as I mentioned, it was actually quite a good trend for the quarter as well. Growth in our leading local omnichannel platform also sequentially accelerated with nearly 190% net consumer online sales growth in the US and nearly 80% growth in Europe in the quarter at constant exchange rates. Underlining operating margins were also very strong in the context of historical levels prior to COVID-19. While COVID-19 continues to create significant uncertainty in 2021, the outstanding first quarter results provide us with the confidence to raise our underlying EPS and group net consumer sales growth outlook for the year, as you have seen in our report. Moving to slide five. We began 2021 in a strategically stronger position versus COVID-19 as such. We remain confident that our two-year stack growth rates will be visibly better than they were pre-COVID-19. And you certainly saw that happened this quarter for the reasons I mentioned a few moments ago. In this slide, we highlight some of the initiatives to increase our share of the consumer wallet and improve our online capabilities. In 2021, we are continuing to increase our online capacity. A few examples are the opening of our more U.S. click and collect locations and a new home delivery fulfillment center at Albert Heijn. We are moving forward with the launch of Ship2Me in the U.S., our endless aisle offering of more than 100,000 general merchandise and food items in the second half of this year. We are expanding our no-fee home delivery service of our Albert Heijn Compact to additional markets in the Netherlands. and are offering also a two hour or less delivery in more cities in Greece and Romania. With increased capacity and strong momentum, we now expect net consumer online sales to grow by over 40% in 2021 versus 30% previously indicated. And this includes raised expectation of over 70% growth in US online sales versus 60% growth previously. It also reflects the expectation for at least 5.5 billion euro in net consumer online sales at BOL.com versus at least 5 billion euro previously. Improving omnichannel productivity also remains a high priority and we strive to improve online productivity by 20% this year through an end-to-end improvement of processes, systems, operating practices and innovation. Slide six highlights some of the key achievements in the US. In the US, we delivered accelerating levels of online growth of nearly 190%, even excluding sales from Fresh Direct, which we acquired in January, growth accelerated to 135%, and Fresh Direct is progressing as planned. We are in a good position to continue capitalizing on the high online demand, with our US household coverage Now 95% through home delivery and click and collect. We have household coverage of 94% for same day options as well. And these are significant improvements in coverage over the prior year. Also the stop and shop remodeled stores continue to provide the sales uplift. And we expect to accelerate the number of remodels in 2021 to approximately 60 stores. Food Lion achieves its 34th consecutive quarter of positive comparable sales growth and has successfully added and opened all 62 of the southeastern grocer stores which we acquired in April. Also in April, we secured and opened nine additional locations that were previously closed by southeastern grocers. Slide seven highlights some of the key achievements in Europe. In Europe, our Benelux ecosystem continued to perform well, and we gained market share in both the Netherlands and Belgium in the quarter. We were also pleased with the high level of net consumer online sales growth, which also accelerated, particularly at bold.com, where sales from third-party sellers grew 101%. The number of sellers on the platform also continues to grow, and there are now 45,000 sellers on the bold.com platform both in Belgium and in the Netherlands. Albert Heijn continues to remodel an additional 29 stores to its fresh and technology-focused format in the first quarter, and they are all performing in line or ahead of expectations. We will remodel approximately 60 stores by the year-end. Albert Heijn continues to expand its home delivery service in the Flanders region in Belgium, and we are now servicing an additional 100,000 households totaling 400,000 households in Belgium at the moment. The last super plus loyalty program providing rewards and discounts to consumers of healthy and sustainable products is providing a sales uplift and continues to gain traction. The program ended the first quarter with nearly 1.7 million members up from 1.35 million members in the fourth quarter of last year. Moving on to slide eight. We continue to make progress in elevating our health and sustainability strategy, and I'll discuss a few of these items. We recently announced a new goal for all of our brands to achieve net zero carbon emissions by 2050. And in March, Albert Heijn was voted by consumers as the Netherlands most sustainable market chain in the sustainable brand index of 2021, ranking the number one for the fifth consecutive year. Bold.com was voted as the most sustainable e-commerce brand in the Netherlands as well. We also successfully priced our inaugural sustainability-linked bond in March, amounting to 600 million euros with a term of nine years. And those are linked to achieving targets in reducing food waste and scope one and two carbon emissions by 2025. I'll now hand over to Nathalie for the financials.