Koninklijke Ahold Del Ord

Ladies and gentlemen, good morning and welcome to the analyst conference call on the fourth quarter and full year 2023 results of Aarhus Alherza. 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 statements. Such risks and uncertainties are discussed in the Summary Report, Fourth Quarter and Fall Year 2023 and also in our Hotel Hares' public filings and other disclosures. Aarhus Dalherza disclosures are available on aarhusdalherza.com. Forelooking statements reflect the current views of Aarhus Dalherza's management and assumptions based on information currently available to Aarhus Dalherza's management. Forelooking statements speak only as of the date they are made and Aarhus Dalherza does not assume any obligation to update such statements 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 Ajo del Herce. At this time, I would like to hand the call over to J.P. O'Meara, Senior Vice President, Head of Investor Relations. Please go ahead.

Yes, thank you, Operator, and good morning, everyone. I'm delighted to welcome you today to our Q4 2023 Results Conference Call. On today's call are Franz Müller, our President and CEO, and Jolanda Putzweil, our CFO. After a brief presentation, we will open the call for questions. In case you haven't seen it, the earnings release and the accompanying presentation slides can be accessed through the investor section of our website, aholdeles.com, which provides extra disclosures and details for your convenience. To ensure everyone has the opportunity to get their questions answered today, I ask that you initially limit yourself to two questions. If you have further questions, then feel free to re-enter the queue. To ensure ease of speaking, all growth rates mentioned in today's prepared remarks will be a constant exchange rating as otherwise stated. And with that, I now turn the call over to Franz.

Thank you very much, JP, and good morning, everyone. I'm pleased to report a solid fourth quarter and announce to 2023. Taking a quick look at our score part, we achieved or exceeded all of our key goals for the year. And Yolanda will go through these numbers in more detail But first, let me share some of our operational highlights for certain contexts. Reflecting on the year, it clearly wasn't an easy one. Not for societies worldwide, nor for businesses. Our teams around the world had to adapt to dynamic, and in many cases, volatile market conditions. Through it all, we achieved a lot, delivering on our commitments and advancing key strategies for our long-term successes. And for this, I would like to thank our over 400,000 strong, dedicated and passionate associates for living our values and continuously feeding our winning culture. This culture starts first and foremost with serving our existing and growing customer base of over 63 million a week. And with high inflation rates impacting the entire value chain, we have been steadfast and left no stone unturned to create value for them. We expanded our high-quality own-brand assortments. We optimized and personalized our loyalty systems. And we ensured that every day, the best of our value proposition was presented to our customers in a clear and seamless way at each touchpoint of our various omni-channel shopping experiences. To fund this, disciplined cost management has been as important as ever, especially as global conflicts create volatility in our supply chains. Inflation and operating costs also played catch up during the year with the lofty levels of headline inflation numbers from 2022. Those of you who have followed us for a long time know that we are not afraid to roll up our sleeves in such climates. and I firmly believe our track record in cost control is second to none, as you can see on slide number eight. Our team has delivered a new record high in our long-standing Save for Our Customers program, generating over 1.25 billion euro in cost savings, or 29% above the prior year level. In addition to this, I'm also proud of our continued support of local communities. Our role as a company goes beyond just the prices on the shelf. It's also our responsibility to help with broader societal challenges, provide access to healthy food, and foster a nurturing environment for associates to thrive. To this end, our brands contributed more than €250 million in charitable cash, product, and food donations to local and regional food banks and non-profit organizations throughout the year. Growing faster than the market is one of the long-term ambitions that keep us sharp and focused. And three areas in particular do matter. Vibrant, modern stores and shopping experiences. High quality, high value product assortments. And lastly, simplifying our go-to-market models to excel on the aspects that really make a difference for our customers. And let me give you an example of each of them. On slide 11, for example, at Food Lion, we continue to elevate the branch fleet of stores to our best-in-class omnichannel format. In 2023 alone, we remodeled more than 10% of the store fleet, and this perpetual cycle of store elevation has in no small way contributed to the now 45 consecutive quarters of comparable store sales growth. At the giant company on page 12, we are also moving at a fast pace, with now more than 60% of the store fleet on the latest for today's table, floor design. And the brand is also punching above its weight in loyalty and digital with the giant tourist rewards, ranked in the top 10 of the Danhambi Retailer Preference Index. In Europe, one of the key drivers of returning volumes to growth for the first time in ten quarters is the extensive rollout of our entry-priced high-quality own-brand assortments. In the region, we now offer more than 7,000 price favorites, price entry products at an enterprise level, and our ambition is to further increase this with 20% in 2024. Albert Heijn is a great example of own-brand execution. which is leveraged extensively to help customers save and get the most for their wallets over the last course of high inflation. And customers love our products, with 16 own-brand products named the best product of the year in the Netherlands. An example of where we simplified our go-to-market model is the Les Belgium. Almost a year now since the team started its future plan, the LES has finalized agreements to 107 out of the 128 owned or bred stores. And the good news is, we already see promising results from the over 40 stores that have already been converted, positioned, with customer frequency and basket size trending upwards. This means market shares have stabilized and increasing market share won't be far behind. This project took conviction and perseverance from the team in Belgium, but with the right plan for customers and associates, the organization will be in stronger shape to win in the market moving forward. In addition, we also took some meaningful decisions as part of our year-long Accelerate initiative, which we launched at the beginning of 2023 to create more agile organizations, further leverage our scale, and empower our people to take action to drive efficiency. The operating model harmonization in the CSE region, the divestment of FreshDirect, and the move to a more asset-light approach in online fulfillment in the U.S. are just some of the areas we worked on that will yield important savings, which we will reinvest in growth in 2024. Finally, let me spend a moment on health and sustainability. Our brands continue to implement projects to promote healthy, affordable food and drive sustainable business practices like reducing food waste and energy consumption and promoting diversity and inclusion in the workplace. These topics remain key and align very closely with our group values. At the end of 2023, we launched our updated climate plan in which we refined decarbonization levers and sharpened the categories for our emission reduction targets. We will host a dedicated session on this and other topics at our upcoming Strategy Day in May and more on that later. But let me now hand over to Yolanda to share her remarks on the financials as well as on our key healthy and sustainability KPIs.