Ahold Delhaize (ENXTAM: AD) 2Q17 Results: Dutch Sales and Merger Synergy Savings Boost Performance

Executive Summary

• Ahold Delhaize reported 2Q17 revenues of €16,121 million, up by 67.3% from 2Q16 in reported currency (+64.6% at constant rates). The jump in reported revenues is due to the merger of Ahold and Delhaize in July 2016.
• Pro forma 2Q17 revenues, which represent the entirety of the merged group, were €16,044 million, up by 3.4% in reported currency (+1.8% at constant currency) and slightly above the consensus estimate of €16,011 million.
• The gross margin fell by 70 basis points, SG&A as a percentage of sales slid by 80 bps and the operating margin was flat. Diluted EPS leapt by 12.0% to €0.28 during 2Q17, slightly above the consensus estimate of €0.27.
• Ahold Delhaize upheld its target of realizing €220 million in net synergies by the end of FY17, of which €22 million was realized in FY16.