Koninklijke Ahold Del Ord

Ladies and gentlemen, good morning and welcome to the analyst conference call on the fourth quarter and full year 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 and uncertainties, 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 our Dalhairs. 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 Q4 and full year 2025 results conference call. On today's call are Franz Muller, our President and CEO, and Yolanda Putz-Pyle, 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. There we provide 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 at constant exchange rates unless otherwise stated. So, with that, Franz, over to you.

Yes. Thank you very much, JP, and good morning, everyone. In 2025, we operated in a rapidly shifting environment. Frequent and unpredictable government policies, pockets of inflation and volatility, and rapid advances in AI and technology. In that context, being a consistent and trusted partner for customers, associates, and all other stakeholders matters more than ever. As you will have seen in our release this morning, I'm proud to say we are delivering on our growing together commitments and are well positioned for what lies ahead. Our execution through the holiday season is a great example of how our growth model is coming together. allowing us to finish the year on high. And for the full year, net sales increased 5.9%, while comparable sales excluding gas increased 3.2%. We delivered unhealthy underlying operating margin of 4%, diluted underlying EPS growth of 7.8%, as well as strong free cash flow, allowing us to increase shareholder returns. In grocery, Success is never driven by only one thing. It's a result of many details coming together and that on an everyday space. As our capabilities mature and integrate, our execution in turn is becoming more connected. The backbone of this is that the flexibility we have created in our ecosystem to deploy scaled and yet tailored solutions. The resilience of our local value propositions and brand personalities, and a disciplined execution driven by aligned teams with a strong culture of ownership and accountability that underpins the growing together strategy. So let me unpack this a little bit more in detail with some practical examples. First, starting with the customer, let's talk about strengthening customer value through trusted products. Across our markets, our local brands invested in price and value by lowering prices and broadening own brand assortments in key daily needs. In the US, we had our first full year investing towards a total of $1 billion in price investments over those four years. And at the same time, we strengthened our own brand assortments, adding 1,100 new products in the US and 1,450 in Europe. In Europe, where own brand penetration is close to 50%, our assortments are a clear competitive advantage. Over the past year, we expanded collaboration through our AMS Buying Alliance, and this delivered quality improvements while also generating cost savings with a further expansion planned into 2026. These efforts are truly resonating with customers. Own brand growth continued to outperform the rest of the store with group level penetration reaching 39.8%, reflecting strong appreciation for quality, health, value, and innovation. The next core block is vibrant customer's experience, covering every interaction between our brands and customers in stores, online, and through services. Customers increasingly expect convenience, personalization, and a seamless integration across channels. In the U.S., we completed the rollout of Prism, creating a unified digital backbone for personalization at scale as it enhances opportunities in advertising and retail media. This enabled us to reach around 32 million customers and deliver 14 billion personalized offers in 2025. Customers are also responding positively to our shift forward towards the same day delivery and partnerships with DoorDash and Instacart, with additional partnerships planned. Together, these initiatives strengthen relevance, convenience, and loyalty across channels. In addition, in 2025, we opened 220 new stores and remodeled more than 450 locations, maintaining a modern, healthy and attractive store fleet. As a result, we have strengthened our number one or two positions in most of the markets where we operate. Another factor which is unlocking compounding opportunities for us is driving customer and business innovation, where digital, data and AI are increasingly powering both customer value and performance. Technology and AI represent a growing share of our €2.7 billion in annual capex. We are applying these capabilities across our ecosystem, improving availability and forecasting, enabling AI-assisted customer journeys, and scaling predictive and visual intelligence solutions. These investments, combined with our focus on local, store-first fulfillment and a more asset-light operating model, are yielding good results. Online sales grew 12.9%, led by 22.8% growth in the U.S. Food Lion had a standout quarter with over 35% e-commerce growth and a 2% point increase in penetrations. With the recent closure of six e-commerce fulfillment facilities, we have now completed the shift to our store-first operating model. In the Netherlands, the Albert Heijn app plays an essential role in daily lives for millions of consumers. Supported by generative AI, the app is becoming more personalized, multilingual, and intuitive. making it easier for customers to plan meals, manage rewards, and discover inspiration and new recipes. At Bol, we continue to innovate across the end-to-end journey. AI-powered features such as Gift Finder and Spot and Shop are increasing engagement and reach. by combining rich shopper insights with impactful campaigns bull was named the number one retail media publisher for the second year in a row in the netherlands retail media as you know is an increasingly important growth machine machine for the company the key strength is our ability to build once and scale across brands with one global retail media platform we can deploy new solutions quickly across markets while tailoring execution locally. So with strong capabilities in place, growth now is more about culture rather than capability, which you can see in our people positions. Good examples here are Margaret's move from Bol to Albert Heijn, or Keith brought a remit in the US as a chief commercial and digital officer. Both Margaret and Keith bring deep retail media and technology expertise into grocery. Also understanding the importance of developing best-in-class digital offerings and boosting capabilities across the commercial value chain through the power of AI. This reflects our belief that a win at one brand is a win for all brands and that scaling talent and capabilities is just as important as scaling technology. So let me now turn to shaping our portfolio to drive growth and excellence, where discipline, portfolio decisions, and operational execution work hand in hand. In Europe, we welcomed Profi at the beginning of 2025, establishing a strong platform in Romania for future growth. Throughout last year, Profi opened 17 new stores, marking the start of a promising growth trajectory. At Albert Heijn, we opened 19 new stores and launched a major refresh of the fresh square concept in more than 500 locations, responding to growing demand for convenient, nutritious food solutions. In Belgium, we now recently completed the acquisition of Louis Deleuze, adding 303 stores and expanding our presence in convenience in 2026. As the largest food retail group on the US eastern seaboard, we see meaningful runway in a still fragmented market. In a region where supermarket volumes declined in 2025, we delivered positive volumes by leading into price, home brands, and omnichannel convenience. In the US, Food Lion launched 153 remodels and started construction on 93 remodels in the Greensboro market. which will be launched later this year. Stop and Shop remodeled over 30 stores, deploying an efficient use of capital, progressing on their revitalization plan. As part of this plan, Stop and Shop improved store standards, service, and value perception. Price investments now cover more than 65% of the fleet, supported by stronger own brands, new marketing and in-store signage, upgraded stores, and improved execution. Through the combination of these efforts, we have seen steadily improving trends in comparable sales growth, including volume growth, by the way, and in our Net Promoter Score, or NPS. Especially encouraging are the year-to-date improvements in value for money and ease of shopping, showing the holistic nature of Roger and his team revitalization efforts. Finally, let me spend a moment on healthy communities and planet because we believe the everyday choices we all make do matter. As a family of great local brands, we are ambitious about the measurable impact we can have, striving to make healthy options more accessible and affordable, supporting the natural systems that make food possible, and reducing waste across our value chain. An important part of this, something we don't often talk about, is our U.S. pharmacy business, which plays a growing role in customer trust, health access, and loyalty. Millions of customers use our pharmacy services, placing them amongst our most engaged shoppers, with the majority of them being primary customers. With ongoing drugstore closures, our pharmacies also provide an important access point for health services in their local communities. Under the Inflation Reduction Act, Medicare prices will come down for 10 high-cost drugs. From a financial perspective, Yolanda will share additional figures as part of the 2026 outlook, which for all intents and purposes is a technical change for us. More importantly, for many customers, this provides meaningful financial relief, potentially freeing up spending for other everyday needs. As we leave 2025 behind, we can be proud of the progress achieved and the strong foundation built in the first year of growing together. Our strategy has been pressure tested, our capabilities are evolving, and our teams are operating in strong rhythm, which is delivering compounding results. We are carrying this momentum into 2026 with confidence in our execution, our portfolio, and our ability to continue to create value for customers, associates, communities, and, of course, shareholders. With that, I will now hand over to Jolanda for more detail on our financial performance and outlook.