Koninklijke Ahold Del Ord

Ladies and gentlemen, good morning and welcome to the analyst conference call on the first quarter 2024 results of Ajo del Herza. 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 interim report, first quarter 2024, and also in Ajo del Herce's public filings and other disclosures. Ajo del Herce disclosures are available on ajodelherce.com. Forelooking statements reflect the current views of Ajo del Herce's management and assumptions based on information currently available to Ajo del Herce's management. Forelooking statements speak only as of the date they are made and Ajo del Herce 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 JP O'Meara, Senior Vice President, Head of Investor Relations. Please go ahead, JP.

Thank you very much, Sharon, and good morning, everybody. I'm delighted to welcome you today to our Q1 2024 results conference call. On today's call are Franz Muller, our President and CEO, and Yolanda Putzbeil, 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 also provides extra disclosures and details for your convenience. As always, and 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. And to ensure ease of speaking, all growth rates mentioned in today's prepared remarks will be at constant exchange rates unless otherwise stated. With that, I hand the call over to Frans.

Thank you, JP, and good morning, everyone. I'm pleased to report a stable first quarter, placing us well on track to reach our goals and aspirations for the full year. 2024 is an important year for our company as we pivot to our refreshed strategy which are very much looking forward to unveiling in two weeks' time. As we tee up for this next phase of our journey, we are working hard to ensure we are fit and ready to transition to a more robust growth profile. On that front, three areas in particular drive much of our operational agenda for this year. First of all, our relentless focus on the customer, our price positioning and assortments, and leveraging the strength of our great local brands. Secondly, further, the simplification of our organization to sustain growth investments and drive innovation. And as always, continue to be laser focused on cost control and cash flow delivery. So let me briefly step into the first two of those, and Jolanda will cover the third as we reflect on the first quarter. Although inflation is stabilizing in our markets, the price value equation continues to be of utmost importance to our customers as household budgets remain tight. Therefore, our brands have been very active delivering great value, quality, and savings to customers, creatively using the full spectrum of our brand assortments and omnichannel toolkits. In the US, one example of this is at Giant Food. which has lowered prices on hundreds of its private label items and has expanded its flexible rewards loyalty program to include double points on giant brand items purchased. Stop & Shop is partnering with the state of Rhode Island to pilot its governmental SNAP program called Eat Well, Be Well. This program is the first of its kind in the U.S., providing SNAP recipients with up to $25 per month in additional financial incentives for purchasing eligible fruits and vegetables. And in Europe, at Albert in the Czech Republic, active users of the MyAlbert app now receive a 15% discount on organic food and Nature's Promise healthy products. This is the third European brand that rewards customers for choosing healthy products, following the Deleuze Super Plus and Albert Heijn premium programs. Moving to the second area of our agenda for 2024, the simplification of our organization. Unlocking the benefits of prior year interventions and building off the additional cost plans we put in place, they are delivering good results, and we can see with the consistent margins we delivered in the first quarter. The largest of those simplification initiatives was the Belgium future plan. One year into the plan, the Deleuze team are making great progress with many key milestones already achieved. In February, the team finalized agreements to franchise all of the 128 owned operated stores. And to date, 76 stores have already transitioned to the new owners. And we are on a good cadence to complete the transitions in the second half of the year. From those stores already transitioned, the results are very promising, with store sales, customer frequency, and basket size all trending upwards. In the US, we made a major move in the first quarter to streamline our support brands into one Ahold de Les USA support organization. This shift will bring all support organizations together to seamlessly partner with the five great local brands, so they can do what they do best, namely be the trusted local grocer in their markets and accelerate omnichannel growth. JJ Fleeman will share more on this and our vision for growth in the US at our upcoming Strategy Day. In addition, our decision to orient our online fulfillment capabilities towards more efficient, less asset-intense same-day delivery models, such as Click and Collect, is really paying off. Our online sales in the U.S. grew 5% year-over-year in the first quarter on a like-for-like basis, fueled by new customer growth as well as strong retention of existing e-commerce customers. We continue to make steps to further improve our e-commerce performance, driven by, first of all, labor efficiencies and cost rationalizations in all channels, transitioning from lower efficient fulfillment centers to our flexible store-first network strategy. And the launch of our partnership with DoorDash is already off to a strong start with 1,800 stores across all five brands now live with the DoorDash marketplace. The partnership is bringing new customers, which are primarily convenience shoppers that are typically purchasing smaller baskets but looking for a faster delivery time for an immediate need. Slide number 10. Driving more growth and leverage from our online capabilities is also a top priority for our European teams, as we should benefit from increasing demand and new external relationships. One such aspect of the online experience that we are developing is an innovative proposition for business customers, with the ambition to offer quality and accessible services to a wide range of companies at an affordable price. At Albert Heijn, The brand has entered into new B2B relationships with large childcare services and healthcare providers, including Holland Food Service, a leading partner for care facilities. And they have also started offering all business customers a standard 10% discount on all organic and Albert Heijn Terra products. And Terra is the Albert Heijn's fully plant-based, own-brand product line, as we extend our health and sustainability ambitions from the home to the workplace. And remember, our omnichannel customers are on average two times more valuable. Driving healthy sales is a key selling point and one of our most important long-term ambitions. We are leaders in healthy product innovation, and it's amazing the things that still can be achieved in product formulation. For example, in 2023, Albert Heijn reduced 150 million sugar cubes, 62,000 kilograms of salt, and 275,000 kilograms of saturated fat from their own brand products compared to the previous year, 2022. And to enable customers to access more fiber-rich foods, Albert Heijn also increased the number of wholemeal breads on the shelf while keeping the price similar to that of the white variety. In terms of innovation on a broader scale, two other initiatives I want to highlight. Our participation in the Global Retail Innovation Fund, called W23 Global, and the launch of our new tech studio in Bucharest called AD01. In April, we announced that Al DeLess has joined forces with four other leading grocery retailers and have established W23 Global, a collaborative venture capital fund to accelerate innovation across the grocery retail ecosystem. The focus of this fund will be on investing in globally scalable tech-led innovative transforming retailing and addressing common ESG challenges. We also launched a new tech studio in Bucharest, Romania called AD01. The first talents are currently coming on board and the plan is to have around 250 top talents involved in this tech studio within the next few years, while fostering a vibrant, inclusive engineering culture. They will work together on innovations with the aim of providing leading customer experience at all the last European brands. You will hear much more on these at our Strategy Day on May 23rd, and I look forward to welcoming many of you in person to the great city of Zaandam. Now over to Yolanda to talk more about the financials.