Koninklijke Ahold Del Ord

Ladies and gentlemen, good morning and welcome to the analyst conference call on the second quarter 2025 results of Ajo del Jez. Please note that this call is being webcast and recorded. During this call, Ajo del Jez anticipates making projections and forward-looking statements. All statements other than statements of historical facts may be forward-looking statements. Forward-looking statements are subject to risks, uncertainties and other factors that are difficult to predict and that may cause our actual results to differ materially from future results expressed or implied by such forward-looking statements. Therefore, you should not place undue reliance on any of these forward-looking statements. The introduction will be followed by a Q&A session. Any views expressed by those asking questions are not necessarily the views of AHODLH. 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, Sharon, and good morning, everybody. I'm delighted to welcome you today to our Q2 2025 results conference call. On today's call are Franz Muller, our President and CEO, and Yolanda Putz-Byle, 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 at holdales.com, which also 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 your questions to two questions to make sure everyone on the call will have sufficient time. If you have further questions, then please feel free to re-enter the queue, and you were all very good last quarter, so again, if you can stick to it this quarter, we'll be very happy. To ensure ease of speaking, all growth rates mentioned in today's prepared remarks will be at constant exchange rates unless otherwise stated. So with that, I'll hand over to Frans.

Yes, thank you, Jeppe, and good morning to all of you. I'm pleased to report another strong quarter for Alderlees, as we sustained solid and consistent results. and in some cases even accelerated growth across our network of great local brands. It's now slightly more than a year since we introduced our Growing Together strategy, and in this first year of our plan, we are focused on kick-starting a period of accelerated growth rates and increased momentum. As I reflect on how things are going to date, I'm confident we are on the right path and that we have put in place the right balance of initiatives suited to winning in this type of environment. When consumers are challenged, executing with clarity and consistency and getting the basics of retail right are super critical. And we are in a great position to do that as we capitalize on the many years of maintaining and modernizing our capabilities. So in that direction, there are three areas I would like to highlight today. How we are adapting our customer value proposition and product assortments so customers feel a positive difference as they shop with us every week. How we are capitalizing on our omnichannel capabilities to drive market share growth at a faster pace than the market. And thirdly, our focus on driving operational excellence in our store base and delivering cost savings across our operations to reinvest in growth. And later, Jolanda will cover how our teams are investing in our long term opportunities to create future growth. So starting with the first area around our customer value proposition. From our growing together strategy, you will know this all about things like delivering trusted products at affordable prices. creating vibrant omni-channel customer experiences to strengthen loyalty and sharpening our competitiveness to drive brand strength and securing our strong relative market positions. As you know, we are backing this up with several investment commitments, including a $1 billion price investment in the U.S. over the coming four years, home brand assortment expansion, and digital personalization programs just to name a few. All our US brands have now launched price investments, while also strategically leveraging the strength of our own brand portfolio. An example of this is Hannaford, and that's in the Northeast. In May, the brand launched a strategic price investment across all our stores in Massachusetts, lowering prices on approximately 2,500 center store-owned brand products. The initiative was bolstered by a targeted omnichannel marketing campaign and leveraged the strength of the Hannaford My Rewards loyalty program. The investment is showing promising results, with center store home brand unit sales outpacing the rest of the store. As a key differentiator, home brand assortments are products that customers can only get in our stores. And in our weekly customer data, we also know the power of a well-executed own brand product has in driving customer loyalty. While we already offer thousands of own brand products in both regions, what also matters is ensuring we continuously innovate and that our own brand products early stand out on shelves and in our marketing for the quality and value they have been designed for. So far this year in the U.S., we have introduced 300 new OM Brand products. And in Europe, we've added 170 new products for joint sourcing, including 100 products in the price favorite range. All our brands have seen year-over-year growth in OM Brand penetration. And in both regions, we are seeing OM Brand sales growth outpace the rest of the store in both dollars or euros and units. Moving to my next area of focus, I would like to start by acknowledging a key milestone that our brands already achieved during the first half of the year. On a fully allocated basis, we have reached e-commerce profitability for the total company. And this underscores the strength and scalability of our omnichannel model, which is a key long-term in driving market share growth at a pace faster than the market. Our improved online profitability has been driven by several key factors, including our orientation towards less asset-intense same-day delivery models, such as click and collect and third-party partnerships, increasing fulfillment capacity, automating operations, and leveraging retail media propositions. More and more, customers are finding value in the convenience of our brand's omnichannel offerings. And for the fifth consecutive quarter, our online grocery sales grew at double-digit levels. This quarter, Food Lion completed its transition to Prism, our in-house developed and proprietary digital and e-commerce platform. Prism enables faster, more tailored online shopping, helping customers easily find their favorite products. and it also allows customers to activate digital coupons, reorder quickly, and choose delivery or pickup with ease. Shortly, we will extend the platform to Hannaford as well, which completes the roll-off of the technology to all the AD USA brands. In Belgium, DELES is stepping up their e-commerce ambitions. During the quarter, they opened a new distribution center in Worst, which doubles their e-commerce capacity. And at the same time, they are taking steps to provide an even smoother customer experience by eliminating the fee to use the in-store pickup service. This makes the service accessible to as many people as possible. It's not only existing customers who are drawn to the benefits of our omnichannel offerings. At the last, half of the new online customers come from outside its network. meaning people with no prior DLS experience discovering the brand through home delivery or in-store pickup. In the US, customers in our DoorDash channel grew 300% over the last year, with half of that growth coming from customers that had not shopped online with any of our brands before. With e-commerce market share expansion in both regions, Our store-only general proposition will continue to be a differentiator for our brands as we look to densify and grow our markets. Lastly, let me spend a little time on how our brands are driving operational excellence and delivering cost savings across our operations to reinvest in growth. Starting with Stop and Shop. It has been one year since we announced decisive and deliberate actions to ensure a stable and thriving future for the brand. And since the announcement, we have closed 32 underperforming stores, started price investments with regularly recalibrating based on customer response, continued store remodels focusing on the more efficient use of capital and a broader store reach, improved store execution and on-shelf availability, and deployed communication tactics to maximize customer awareness and emphasize own brands. We are encouraged by customers' response to the initiatives, which we have implemented so far. And where we have made investments, we are attracting new customers, seeing increased volumes, and seeing an improved net promoter score. While we are celebrating the wins, we continue to focus on executing the plan, driving sales, and finding sustainable and substantial efficiencies. This includes a strong focus on supply chain optimization, as well as maximizing promotional effectiveness. In the second half of the year, we will expand our price investments to additional markets, further optimize our assortment, and continue our store remodels. We are also making good progress with the integration of Profi, the business in Romania, which will significantly to our revenue growth ambitions in Europe and strengthen our market position within Romania. Work is progressing on the back end to fully integrate PROFI into both our established footprint in Romania and the broader central and southeastern European region. Within Romania, Megimage and PROFI are exchanging best practices, and this enables both brands to learn from each other's operational strength. and accelerate collective growth while maintaining their distinct identities and commercial focus. While integration work continues, our local profit teams remain committed to their local mission, serving both urban and rural communities through a diverse portfolio of store formats that cater to the varied shopping needs of customers. So far this year, Profi has opened over 20 new locations, and the brand is on track to open 100 by the end of the year. And they continue to set new record highs for number of weekly visitors and weekly sales. More broad-based, we're also well on track to hit our goals for safe for our customer, as both our regions continue to work on leveraging our scale and synergy potential. So that completes my review of our performance. With our strong culture, known for its agility, consistency, ability to drive transformative change, and the commitment to sustainability, we are well prepared to navigate the complexities of the current business environment and position the company to drive brand strength and market share growth in the periods to come. Now over to you, Jolanda, to talk more about the financials.