Dutch food retailer Koninklijke Ahold Delhaize NV on Nov. 13 revealed its financial targets for the next three years at Capital Markets day in a bid to increase comparable sales growth and market share during the period.
The company said it will focus on growth by improving its delivery and click-and-collect network and by investing in its stores, omnichannel offering and technological capabilities. It expects a capital expenditure of €2 billion to reposition its largest U.S. brand, Stop & Shop.
For full year 2018, the retailer issued an EPS guidance of €1.50 to €1.60. It expects high single-digit EPS growth with a stable group margin in 2019.
To control costs, the food retailer will also launch a €1.8 billion cumulative Save for Our Customers cost program through 2021 and aims for a free cash flow of about €2 billion per year in the three-year period. Capital expenditure will be about 3% of annual sales during the coming three years.
"Our commitment is to self-fund the investments needed to drive growth, as our new cost savings program will allow us to maintain a stable group margin through 2019. This will allow us to invest in our stores, omnichannel offering and technology, while we explore and seize new leadership opportunities in existing and adjacent markets," President and CEO Frans Muller said.
The company will also buy back €1 billion of its own shares in 2019 in addition to the 12-month €2 billion share repurchase program that started in January.
