Food Lion 2009 Annual Report Download - page 40

36 - Delhaize Group - Annual Report 2009
FINANCIAL REVIEW
Income Statement
In 2009, Delhaize Group generated revenues of
EUR 19.9 billion. Compared to 2008, this represents
an increase of 1.2% at identical exchange rates
or 4.8% at actual exchange rates, due to the
strengthening of the U.S. dollar by 5.4% against the
euro. Excluding the 53rd week in the U.S. in 2008,
revenues grew by 2.6% at identical exchange
rates and 6.2% at actual exchange rates. Organic
revenue growth was 2.4%.
Delhaize Group ended 2009 with a sales network
of 2 732 stores, an increase of 59 stores compared
to 2008, including 3 acquired Prodas (Romania)
and 10 Koryfi stores (Greece).
The U.S. operating companies generated 68.3%
of Group revenues, Belgium 23.1%, Greece 7.4%
and the Rest of the World segment (Romania and
Indonesia) 1.2%.
In 2009, our U.S. operations generated revenues of
USD 19.0 billion (EUR 13.6 billion), 1.3% lower than in
2008, in local currency. Excluding the 53rd week in
2008, revenues in local currency were 0.7% above
2008. Comparable store sales decreased by 0.4%.
All our U.S. banners continued their price investments,
targeted promotional offers and assortment
optimizations, supported by the three-tiered private
brand program. This resulted in an improvement of the
volume trends of number of transactions and numbers
of items per transaction. Price investments were
largely made possible through savings generated
from better inventory management, product mix
improvements and better supplier conditions. Further
price investments will be funded by many sales
buiding initiatives as well as the new organizational
structure, ”Delhaize America,” managing all our U.S.
banners using a shared services approach.
Revenues at Delhaize Belgium amounted to EUR
4.6 billion in 2009, a 4.7% increase over 2008.
Comparable store sales growth was 2.7%, an
improvement compared to 2.2% in 2008. As a result
of a sustained price repositioning campaign started
early 2008, supported by strong marketing and
communication activities, Delhaize Belgium gained
market share every week of 2009. Market share for
the year grew by 58 basis points to 25.7% (source:
AC Nielsen).
In 2009, revenues in Greece grew by 10.2% to EUR 1.5
billion, as a result of excellent comparable store sales
growth and the continued growth of its store network.
Revenues of the Rest of the World segment (Romania
and Indonesia) of Delhaize Group increased by
27.3% (at identical exchange rates) in 2009 to EUR
233 million due to the expansion of the store network
in both countries (primarily from the acquisition of La
Fourmi in 2008 and Prodas in 2009, both in Romania)
and high retail inflation.
Gross margin increased to 25.7% of revenues,
compared to 25.3% in 2008. In the U.S., gross margin
increased by 18 basis points to 27.9%, due to improved
inventory results at all three operating companies,
lower utility costs and improved distribution labor
productivity at Food Lion, partially offset by price
investments and promotions. At Delhaize Belgium,
gross margin increased by 78 basis points to 20.0%
of revenues as a result of better supplier terms and
improved inventory results. In Greece, gross margin
increased by 116 basis points to 23.8%, mainly as a
result of better supplier terms.
Other operating income decreased by 18.7% to EUR
78 million due to lower income from waste recycling
activities as a result of lower prices for paper and
less income related to the sale of Cash Fresh stores
in Belgium. Prior year included a EUR 5 million capital
gain realized at Alfa Beta.
Non-GAAP Measures
In its financial communication, Delhaize Group uses certain
measures that have no definition under IFRS or other generally
accepted accounting standards (non-GAAP measures). Delhaize
Group does not represent these measures as alternative measures
to net profit or other financial measures determined in accordance
with IFRS. These measures as reported by Delhaize Group might
differ from similarly titled measures by other companies. We
believe that these measures are important indicators for our
business and are widely used by investors, analysts and other
parties. A reconciliation of these measures to IFRS measures
can be found in the chapter “Supplementary Information” of
this report p. 143. A definition of non-GAAP measures and ratios
composed of non-GAAP measures can be found in the glossary
on p. 156. The non-GAAP measures provided in this report have
not been audited by the statutory auditor.
2007 2008 2009
937
904
942
Revenues (in billions of EUR)
Operating Margin (in %)
Operating Profit (in millions of EUR)
2007 2008 2009
4.9
4.8
4.7
2007 2008 2009
18.9
19.0
19.9